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Filed Pursuant to Rule 424(b)(5)
Registration No. 333-255500
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PROSPECTUS
SUPPLEMENT
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(To Prospectus dated
May 18, 2021)
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CALEDONIA MINING CORPORATION PLC
Up to $30,000,000
Common Shares
Caledonia Mining Corporation Plc (the “Company” or
“Caledonia”) is hereby offering to sell common shares
(“Common Shares”) having an aggregate offering price of up
to $30,000,000 under this prospectus supplement (the “Prospectus
Supplement”) to the accompanying prospectus of the Company
which was declared effective by the United States Securities and
Exchange Commission (the “SEC”) on May 18, 2021 (the
“Prospectus”).
The
Company entered into a sales agreement dated May 17, 2023 (the
“Sales Agreement”), with Cantor Fitzgerald & Co. (the
“Agent”) relating to the sale of Common Shares. In
accordance with the terms of the Sales Agreement and this
Prospectus Supplement, the Company may offer and sell Common Shares
having an aggregate offering price of up to $30,000,000 (the
“Offering”) from time to time, on or after the date hereof,
through the Agent.
Our
Common Shares are listed on the NYSE American LLC (“NYSE
American”) under the symbol “CMCL”, depositary interests in our
Common Shares are admitted to trading on the AIM of the London
Stock Exchange Group plc (the “AIM”) under the symbol “CMCL”
and depositary receipts representing our Common Shares are listed
on the Victoria Falls Stock Exchange (the “VFEX”) under the
symbol “CMCL”. On May 16, 2023, the closing price of the Common
Shares and depositary interests on the NYSE American was $13.13 and
on AIM was £10.70 respectively. On April 21, 2023, which was the
last date that depositary receipts traded on the VFEX, the closing
price on the VFEX was $16.00. We have applied to list up to
2,000,000 Common Shares distributed under this Prospectus
Supplement on the NYSE American. Listing will be subject to us
fulfilling all of the listing requirements of the NYSE
American.
Upon
our delivery of a placement notice and subject to the terms and
conditions of the Sales Agreement, sales of Common Shares, if any,
under this Prospectus Supplement and the accompanying Prospectus
are anticipated to be made in transactions that are deemed to be an
“at the market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended (“Securities
Act”). Subject to the terms of the Sales Agreement, the Agent
is not required to sell any specific number or dollar amounts of
securities but will act as a sales agent using commercially
reasonable efforts consistent with its normal trading and sales
practices, on mutually agreed terms between the Agent and us. There
is no arrangement for funds to be received in any escrow, trust or
similar arrangement.
The
Company will pay the Agent compensation for their services in
acting as agent in the sale of Common Shares pursuant to the terms
of the Sales Agreement. The Company will pay the Agent compensation
up to but not exceeding 3% of the gross proceeds from sales of
Common Shares made thereunder. In connection with the sale of
Common Shares on our behalf, the Agent will be deemed to be an
“underwriter” within the meaning of the Securities Act and the
compensation of the Agent will be deemed to be underwriting
commissions or discounts.
An investment in our Common Shares involves a high degree of risk
and must be considered speculative due to the nature of our
business and the present stage of exploration and development of
certain of our properties. Prospective investors should carefully
consider the risk factors described in this Prospectus Supplement
and the Prospectus under “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements” and the risk factors
discussed in our annual report on Form 20-F for the year ended
December 31, 2022, which are incorporated by reference into this
Prospectus Supplement and the Prospectus.
Neither the United States Securities and Exchange Commission, nor
any state securities regulator, has approved or disapproved the
securities offered hereby or passed upon the accuracy or adequacy
of this Prospectus Supplement or the Prospectus. Any representation
to the contrary is a criminal offence.
The Common Shares offered by this Prospectus Supplement have not
been qualified for distribution by a prospectus in Canada and may
not be offered or sold in Canada during the course of their
distribution.
This Prospectus Supplement is not directed at, and may not be acted
on, by anyone in the United Kingdom. The Common Shares are not
intended to be offered, sold or otherwise made available to and
should not be offered, sold or otherwise made available to any
investor in the United Kingdom. This Prospectus Supplement is not a
compliant prospectus for the purposes of the Prospectus Regulation
(EU) 2017/1129 (to the extent brought into UK law by the European
Union (Withdrawal) Act 2018 (EUWA) (as amended)) because it is not
a public offer in the UK. It is a financial promotion for the
purposes of section 21 Financial Services and Markets Act 2000
(“FSMA”), but neither has it been issued by, nor has its content
been approved by, a person authorised and regulated under FSMA.
This Prospectus Supplement is being addressed only to persons
outside the UK and it therefore is an exempt promotion. Reliance on
this document for the purpose of engaging in any investment
activity may expose an individual to a significant risk of losing
all of the property or other assets invested. Any person who is in
any doubt about the subject matter to which this document relates
should consult a person duly authorised for the purposes of FSMA
who specialises in the acquisition of shares and other
securities.
A copy of this Prospectus Supplement and the Prospectus have been
delivered to the Jersey Registrar of Companies in accordance with
Article 5 of the Companies (General Provisions) (Jersey) Order
2002, and the Jersey Registrar of Companies has given, and has not
withdrawn, consent to its circulation.
The Jersey Financial Services Commission (“JFSC”) has given, and
has not withdrawn, its consent under Article 2 of the Control of
Borrowing (Jersey) Order 1958 to the issue of shares in the
Company. The JFSC is protected by the Control of Borrowing (Jersey)
Law 1947 against any liability arising from the discharge of its
functions under that law.
It must be distinctly understood that, in giving these consents,
neither the Jersey Registrar of Companies nor the JFSC takes any
responsibility for the financial soundness of the Company or for
the correctness of any statements made, or opinions expressed, with
regard to it. If you are in any doubt about the contents of this
Prospectus Supplement or the Prospectus, you should consult your
stockbroker, bank manager, solicitor, accountant or other financial
adviser.
The price of shares and the income from them can go down as well as
up. Nothing in this Prospectus Supplement, the Prospectus or
anything communicated to holders or potential holders of any of our
shares (or interests in them) by or on our behalf is intended to
constitute or should be construed as advice on the merits of the
purchase of or subscription for any shares (or interests in them)
for the purposes of the Financial Services (Jersey) Law 1998.
The directors of the Company have taken all reasonable care to
ensure that the facts stated in this Prospectus Supplement and
Prospectus are true and accurate in all material respects, and that
there are no other facts the omission of which would make
misleading any statement in the Prospectus Supplement or
Prospectus, whether of facts or opinion. All of our directors
accept responsibility accordingly.
Cantor
The date of this Prospectus Supplement is May 18, 2023.
TABLE OF CONTENTS
PROSPECTUS
ABOUT THIS PROSPECTUS SUPPLEMENT AND
THE ACCOMPANYING PROSPECTUS
This
document is in two parts. The first part is the Prospectus
Supplement, including the documents incorporated by reference,
which describes the specific terms of this Offering. The second
part, the Prospectus, including the documents incorporated by
reference therein, provides more general information. References to
this Prospectus may refer to both parts of this document combined.
You are urged to carefully read this Prospectus Supplement and the
Prospectus, and the documents incorporated herein and therein by
reference, before buying any of the Common Shares being offered
under this Prospectus Supplement. This Prospectus Supplement may
add, update or change information contained in the Prospectus. To
the extent that any statement made in this Prospectus Supplement is
inconsistent with statements made in the Prospectus or any
documents incorporated by reference herein, the statements made in
this Prospectus Supplement will be deemed to modify or supersede
those made in the Prospectus and such documents incorporated by
reference.
Only
the information contained or incorporated by reference in this
Prospectus Supplement and the Prospectus should be relied upon.
Neither us nor the Agent has authorized any other person to provide
different information. If anyone provides different or inconsistent
information, it should not be relied upon. The Common Shares
offered hereunder may not be offered or sold in any jurisdiction
where the offer or sale is not permitted. It should be assumed that
the information appearing in this Prospectus Supplement and the
Prospectus and the documents incorporated by reference herein and
therein are accurate only as of their respective dates. Our
business, financial condition, results of operations and prospects
may have changed since those dates.
This
Prospectus Supplement does not constitute, and may not be used in
connection with, an offer to sell, or a solicitation of an offer to
buy, any securities offered by this Prospectus Supplement by any
person in any jurisdiction in which it is unlawful for such person
to make such an offer or solicitation.
In this Prospectus Supplement, unless stated otherwise, the
“Company,” “Caledonia” “we,” “us” and “our” refer to Caledonia
Mining Corporation Plc and its subsidiaries, and all references to
“dollars” or “$” are references to U.S. dollars unless otherwise
specified.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This
Prospectus Supplement and the Prospectus, including the documents
incorporated herein and therein by reference, contain
“forward-looking information” and “forward-looking statements”
within the meaning of the United States Private Securities
Litigation Reform Act of 1995 and applicable Canadian securities
legislation that involve risks and uncertainties relating, but not
limited to, the Company’s current expectations, intentions, plans,
and beliefs. Forward-looking information can often be identified by
forward-looking words such as “anticipate”, “believe”, “expect”,
“goal”, “plan”, “target”, “intend”, “estimate”, “could”, “should”,
“may” and “will” or the negative of these terms or similar words
suggesting future outcomes, or other expectations, beliefs, plans,
objectives, assumptions, intentions or statements about future
events or performance. Examples of forward-looking information in
this Prospectus Supplement and the Prospectus, including the
documents incorporated by reference herein and therein, include:
the Company’s mineral reserve and mineral resource calculations
with underlying assumptions, production guidance, estimates of
future/targeted production rates, planned mill capacity increases,
estimates of future metallurgical recovery rates and the ability to
maintain high metallurgical recovery rates, the Company’s plans and
timing regarding further exploration, drilling and development, the
prospective nature of exploration and development targets, the
ability to upgrade and convert mineral reserves and mineral
resources, capital costs, our intentions with respect to financial
position and third party financing and future dividend payments.
This forward-looking information is based, in part, on assumptions
and factors that may change or prove to be incorrect, thus causing
actual results, performance or achievements to be materially
different from those expressed or implied by forward-looking
information. Such factors and assumptions include, but are not
limited to: failure to establish estimated mineral reserves and
mineral resources, the grade and recovery of ore which is mined
varying from estimates, success of future exploration and drilling
programs, reliability of drilling, sampling and assay data,
assumptions regarding the representativeness of mineralization
being inaccurate, success of planned metallurgical test-work,
capital and operating costs varying significantly from estimates,
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, changes in government
regulations, legislation and rates of taxation, inflation, changes
in exchange rates and the availability of foreign exchange,
fluctuations in commodity prices, delays in the development of
projects and other factors.
Readers should be aware that these statements are subject to known
and unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those suggested by the
forward-looking statements. Such factors include, but are not
limited to: risks relating to estimates of mineral reserves and
mineral resources proving to be inaccurate, fluctuations in gold
price, risks and hazards associated with the business of mineral
exploration, development and mining (including environmental
hazards, industrial accidents, unusual or unexpected geological or
structural formations, pressures, power outages, explosions,
landslides, cave-ins and flooding), risks relating to the credit
worthiness or financial condition of suppliers, refiners and other
parties with whom the Company does business; inadequate insurance,
or inability to obtain insurance, to cover these risks and hazards,
employee relations; relationships with and claims by local
communities and indigenous populations; political risk; risks
related to natural disasters, terrorism, civil unrest, public
health concerns (including health epidemics or outbreaks of
communicable diseases such as COVID-19); availability and
increasing costs associated with mining inputs and labor; the
speculative nature of mineral exploration and development,
including the risks of obtaining or maintaining necessary licenses
and permits, diminishing quantities or grades of mineral reserves
and mineral resources as mining occurs; global financial condition,
the actual results of current exploration activities, changes to
conclusions of economic evaluations, and changes in project
parameters to deal with un-anticipated economic or other factors,
risks of increased capital and operating costs, environmental,
safety or regulatory risks, expropriation, the Company’s title to
properties including ownership thereof, increased competition in
the mining industry for properties, equipment, qualified personnel
and their costs, risks relating to the uncertainty of timing of
events including targeted production rate increase and currency
fluctuations. Readers are cautioned not to place undue reliance on
forward-looking information. By its nature, forward-looking
information involves numerous assumptions, inherent risks and
uncertainties, both general and specific, that contribute to the
possibility that the predictions, forecasts, projections and
various future events will not occur. The Company undertakes no
obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information,
future events or other such factors which affect this information,
except as required by law. For the reasons set forth above,
investors should not place undue reliance on forward-looking
statements.
Additional risks and uncertainties relating to us and our business
can be found in the “Risk Factors” section of this
Prospectus Supplement and the Prospectus, as well as in our other
documents incorporated by reference herein.
DOCUMENTS INCORPORATED BY
REFERENCE
Information has been incorporated by reference in this
Prospectus Supplement from documents filed with the SEC and is
therefore deemed to be incorporated by reference into the
Prospectus for purposes of this Offering. Copies of documents
incorporated herein by reference may be obtained on request without
charge from our Company Secretary at B006 Millais House, Castle
Quay, St Helier, Jersey JE2 3EF (telephone +44 1534 679800). Our
filings through the SEC’s Electronic Data Gathering, Analysis and
Retrieval system, which is commonly known by the acronym
“EDGAR,” may be accessed at www.sec.gov, are not
incorporated by reference in this Prospectus except as specifically
set out herein or therein.
The
following documents which have been filed by us with the SEC, are
also specifically incorporated by reference into, and form an
integral part of the Prospectus, as supplemented by this Prospectus
Supplement:
Any documents we file with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) after the date of this Prospectus
Supplement and prior to the termination of the offering of our
common stock to which this prospectus supplement relates will
automatically be deemed to be incorporated by reference into this
prospectus supplement and to be part hereof from the date of filing
those documents. Any documents we filed with the SEC pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
April 28, 2023 is superseded by our Annual Report on Form 20-F for
the year ended December 31, 2022. Any statement contained herein or
in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for
the purposes of this Prospectus Supplement and the Prospectus to
the extent that a statement contained herein, or in any other
subsequently filed document which also is incorporated or is deemed
to be incorporated by reference herein, modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this Prospectus Supplement and the Prospectus.
We
will provide to each person, including any beneficial owner, to
whom a Prospectus is delivered, a copy of any or all of the
information that has been incorporated by reference in the
Prospectus but not delivered with the Prospectus. We will provide
this information, at no cost to the requester, upon written or oral
request at the following address or telephone number: B006 Millais
House, Castle Quay, St Helier, Jersey JE2 3EF (telephone +44 1534
679800).
RISK FACTORS
An
investment in our Common Shares is subject to a number of risks. A
prospective purchaser of our Common Shares should carefully
consider the information and risks faced by us described in this
Prospectus Supplement, the Prospectus and the documents
incorporated by reference herein and therein, including without
limitation the risk factors set out under the headings “Risk
Factors” in our Annual Report on Form 20-F for the year ended
December 31, 2022.
Our
operations are highly speculative due to the high-risk nature of
our business, which include the acquisition, financing,
exploration, development of mineral infrastructure and operation of
mines. The risks and uncertainties set out below are not the only
ones we face. Additional risks and uncertainties not currently
known to us or that we currently deem immaterial may also impair
our operations. If any of the risks actually occur, our business,
financial condition and operating results could be adversely
affected. As a result, the trading price of our shares could
decline and investors could lose part or all of their investment.
Our business is subject to significant risks and past performance
is no guarantee of future performance.
Risks Related to this Offering and our Common Shares
Management will have broad discretion as to the use of the proceeds
from this Offering and may not use the proceeds as proposed.
Although we expect to use the amount of net proceeds from this
Offering for investment in the development of the sulphide project
owned by our subsidiary Bilboes Holdings (Private) Limited
(“Bilboes Holdings”) (“Bilboes” or the “Bilboes
sulphide project”), our management team will have broad
discretion as to the application of the net proceeds from this
Offering and could use them for purposes other than those
contemplated at the time of the Offering. Our management may use
the net proceeds for other corporate purposes that may have an
alternative effect on our financial condition or market value.
We may incur additional costs or delays in the development,
construction and operation of the Bilboes sulphide project or
improvements to it and may not be able to recover its investment or
complete the project.
We
propose to use the proceeds from this Offering to develop the
Bilboes sulphide project. The development, construction, expansion
or modification of the project is likely to involve many risks,
including:
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maintaining necessary or desirable
government approvals, permits and licenses; |
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environmental remediation of soil
or groundwater at the site; |
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unforeseen engineering,
environmental and geological problems; |
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unanticipated cost overruns; |
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failure of contracting parties to
perform under contracts, including engineering procurement
construction contractors; and |
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inability to obtain financing. |
You will experience dilution as a result of the Offering.
Giving effect to the issuance of Common Shares in this Offering,
the receipt of the expected net proceeds and the use of those
proceeds, this Offering will have a dilutive effect on our expected
net income available to our shareholders per share and funds from
operations per share. The dilution per share to an investor
participating in this Offering, assuming an offering price of
$13.13 per Common Share, the closing price of our Common Shares on
the NYSE American on May 16, 2023, will be $0.03 (see
“Dilution” below).
You may experience future dilution as a result of future equity
offerings.
We
are not restricted from issuing additional securities in the
future, including Common Shares, securities that are convertible
into or exchangeable for, or that represent the right to receive,
Common Shares or substantially similar securities. To the extent
that we raise additional funds through the sale of equity or
convertible debt securities, the issuance of such securities could
result in dilution to our shareholders. We may sell Common Shares
or other securities in any other offering at a price per share that
is less than the price per share paid by investors in this
Offering, and investors purchasing Common Shares or other
securities in the future could have rights superior to existing
shareholders. The price per share at which we sell additional
Common Shares, or securities convertible or exchangeable into
Common Shares, in future transactions may be higher or lower than
the price per share paid by investors in this Offering.
THE COMPANY
Overview
Caledonia Mining Corporation Plc (previously Caledonia Mining
Corporation) was incorporated, effective February 5, 1992, by the
amalgamation of three predecessor companies and was registered at
the time under the Canada Business Corporations Act. Following the
creation of Caledonia, our Common Shares were listed on the Toronto
Stock Exchange (“TSX”).
Effective April 1, 2006, we purchased 100% of the issued shares of
the Zimbabwean company, Caledonia Holdings Zimbabwe (Private) Ltd
(“CHZ”) that held 100% of the shares of Blanket Mine (1983)
(Private) Limited, the owner of the mine known as “Blanket Mine”
which is located in the southwest of Zimbabwe, approximately 15 km
northwest of Gwanda, the provincial capital of Matabeleland South
(the “Blanket Mine”). The purchase consideration was
$1,000,000 and 20,000,000 of our shares. We acquired all the assets
and assumed all the liabilities of CHZ. In 2012, we complied with
indigenization legislation in Zimbabwe which resulted in a
reduction in our shareholding in Blanket Mine to 49%. We conducted
share consolidations in 2013 and 2017, at ratios of 10:1 and 5:1,
respectively. We re-domiciled from Canada to Jersey using a legal
process called “Continuance” on March 19, 2016. We operate
under the Companies (Jersey) Law 1991, as amended, (the
“Companies Law”). We completed a transaction in January 2020
whereby we purchased a 15% shareholding in Blanket Mine from one of
the indigenous shareholders, resulting in our current holding of
64% in Blanket Mine. Our shares began trading on the NYSE American
on July 27, 2017 and on June 19, 2020 we voluntarily delisted our
Common Shares from the TSX. On December 2, 2021, we issued and
listed depositary receipts representing Common Shares on the VFEX.
On January 6, 2023 we completed the acquisition of Bilboes Gold
Limited (“Bilboes Gold”), the owner of Bilboes Holdings, for
a total consideration of 5,123,044 of our shares and a 1% net
smelter royalty on the revenues generated by Bilboes Holdings
(“NSR”). The NSR is an agreement to pay one of the vendors
of Bilboes Gold, Baker Steel Resources Trust Limited, 1% (after
allowable deductions e.g. smelting charges) of revenues from any
mineral, metal, aggregate or other substance produced at the
Bilboes Holdings’ mining claims area. The royalty was agreed to be
granted in exchange for a proportion of shares in the Company which
Baker Steel Resources Trust Limited would have been entitled to as
a seller of Bilboes Gold. The royalty is perpetual but is capped
for regulatory reasons at a maximum of $90,000,000.
Our
primary focus is the operation of the production-stage Blanket Mine
(64% interest); and the exploration and development of mineral
properties for precious metals, including the exploration stage
Bilboes sulphide project (100% interest) at which we have commenced
mineral extraction of oxide material prior to estimating mineral
reserves or mineral resources under Subpart 1300 of Regulation S-K
(“Subpart 1300”), the exploration stage Maligreen project
(100% interest) and the exploration stage Motapa project (100%
interest) which is contiguous with the Bilboes sulphide project.
The coordinates of Blanket Mine and our exploration projects are as
follows:
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PROJECT |
MINE |
EASTING |
NORTHING |
SURVEY SYSTEM |
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BLANKET |
BLANKET |
698186.22 |
7692882.87 |
ARC 1950 UTM ZONE 35 |
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BILBOES |
ISABELLA |
662711 |
7847486 |
ARC 1950 UTM ZONE 35K, CLARKE
1880 |
|
BILBOES |
McCAYS |
666183 |
7849779 |
ARC 1950 UTM ZONE 35K, CLARKE
1880 |
|
BILBOES |
BUBI |
685072 |
7864896 |
ARC 1950 UTM ZONE 35K, CLARKE
1880 |
|
MOTAPA |
MOTAPA |
663715 |
7844578 |
ARC 1950 UTM ZONE 35K, CLARKE
1880 |
|
MALIGREEN |
MALIGREEN |
720951 |
7895949 |
ARC 1950 UTM ZONE 35K, CLARKE
1880 |
The
bulk of our activities are currently focused on the Blanket Mine in
Zimbabwe. Our business during the last three completed fiscal years
has been focused primarily on increasing production to 80,000 oz.
of gold by 2022 through our investment plan. Total gold production
at the Blanket Mine for 2022 was 80,775 oz. (2021: 67,476; 2020:
57,899). Gold producers compete globally based on their operating
and capital costs. Certain gold producers benefit from their
ability to produce other minerals in commercial quantities as
by-products. We derive approximately 0.1% of our revenues from
silver, which is insignificant. 100% of the Blanket Mine’s revenues
over the last three years was derived from its operations in
Zimbabwe.
Bilboes
Bilboes Gold was purchased by the Company due to the potential of
the sulphide mineralization. Before the Company signed the purchase
agreement, the former owners of Bilboes Gold had completed a
feasibility study on the sulphide mineralization pursuant to
Canada’s National Instrument 43-101 – Standards of Disclosure
for Mineral Projects (“NI 43-101”), with an effective
date of December 15, 2021, which included an NI 43-101 compliant
estimate of proven and probable mineral reserves of 1.96 million
ounces of gold in 26.64 million tonnes at a grade of 2.29 g/t and
measured and indicated mineral resources of 2.56 million ounces of
gold in 35.18 million tonnes at a grade of 2.26 g/t (inclusive of
mineral reserves) and inferred mineral resources of 577,000 ounces
of gold in 9.48 million tonnes at a grade of 1.89 g/t. The Company
is not treating these estimates as current estimates of mineral
resources or mineral reserves pursuant to Subpart 1300 because a
qualified person has not done sufficient work to classify the
estimate as a current estimate of mineral resources or mineral
reserves under Subpart 1300. Until the Company has completed a
Subpart 1300 compliant technical report summary for the Bilboes
project that contains an estimate of mineral reserves or mineral
resources, the project is deemed for Subpart 1300 purposes to have
no mineral reserves and no mineral resources.
Bilboes owns a group of claims that consist of four open-pit mining
properties in Matabeleland North Province of Zimbabwe. These open
pits are referred to as Isabella North, Isabella South, McCays and
Bubi. The first three are situated 80 km due north of Bulawayo
whilst Bubi is 100 km due northeast of Bulawayo and about 32 km
northeast of Isabella. Bulawayo is the second largest city of
Zimbabwe with an approximate population of 655,675 (2013) and
located approximately 400km south of Harare, the capital city of
Zimbabwe.
The
current feasibility study is focused on the underyling sulphide
mineralization covering 128 claim blocks wholly owned by Bilboes
Holdings. Of the 128 blocks, 48 gold and base metal blocks and a
Special Mine site belong to the Isabella mining area while McCays
comprises of 33 gold blocks and Bubi consists of 47 gold blocks.
The claims are protected annually against forfeiture through gold
production and exploration work and Bilboes Holdings has exclusive
rights to subsurface areas to produce gold from these
properties.
Bilboes Holdings also holds 3,485 ha of additional claims and
91,769 ha of exploration license applications referred to as
Exclusive Prospecting Orders “EPOs” around Isabella-McCays-Bubi and
the Gweru area. These claims and EPOs have highly prospective
targets which offer Bilboes excellent prospects for organic growth.
Bilboes Holdings has applied for an extension of the EPOs tenure
for a further 3 years after the initial 3-year tenure expired in
July 2021.
Drilling of the sulphides to provide data for the feasibility study
was done in three phases totalling 93,400 m. The first phase by
Anglo American Corporation was between 1994 and 1999 to define the
initial mineralization and the second phase by Bilboes Holdings
from 2011 to 2013 was focused on expanding the mineralization. The
latest drilling was conducted by Bilboes from December 2017 to
November 2018. The third campaign conducted by Bilboes from 2017 to
2018 focused on upgrading of the mineralization, as required for
the feasibility study.
The
feasibility metallurgical test work was concluded in different
phases over a period extending from September 2013 to March 2019
and involved various laboratories and consultants. The
metallurgical test-work programme involved:
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Chemical analyses and mineralogical
characterisation |
|
· |
Comminution covering crushability
and grinding / milling testing |
|
· |
Process route identification which
involved pilot plant testing of flotation BIOX® technology |
The
metallurgical test-work study projected operational gold recovery
of approximately 84% of the gold contained using BIOX® technology
in conjunction with carbon-in-leach processing. The BIOX® process
is used to pre-treat refractory sulphide gold ores to increase gold
recovery rates during the metallurgical extraction process. The
gold in these sulphide ores is encapsulated in sulphide minerals
which prevent the gold from being leached by cyanide. The BIOX®
process destroys the sulphide minerals and exposes the gold for
subsequent cyanidation, increasing recovery rates. The process has
many advantages which include:
| • |
|
Improved rates of gold
recovery |
| • |
|
Significantly lower capital
costs |
| • |
|
Robust technology that is suited to
remote areas |
| • |
|
Low level of skills required for
operation |
| • |
|
Environmentally friendly |
| • |
|
Ongoing process development and
improvement |
From
past studies it has been envisaged that the sulphide ore would be
mined using the conventional open pit mining method to depths of
approximately 200 – 250m. The process would require crushing,
milling, flotation to recover concentrate ore and finally gold
recovery from BIOX® and Carbon in Leach cyanidation. The project
would require significant upgrade in terms of infrastructure
including power, water, roads, workshops and housing and offices. A
tailings storage facility would also be constructed to accommodate
the waste and waste water from the process including obtaining the
requisite permits for the operations.
The
Company has commissioned its own feasibility study to identify the
most judicious way to commercialize the Bilboes sulphide project
and optimize shareholder returns. One approach that is being
considered is a phased development which would minimize the initial
capital investment and reduce the need for third party funding.
Additional financing and infrastructure will be required to develop
the Bilboes sulphide project.
The
following is a description of the current activities and
infrastructure at Bilboes:
Oxide Mining
The
extraction of overlying oxide material at the properties is not
considered material by the Company but is intended to support the
operational integrity of Bilboes Holdings whilst the feasibility
study is being completed. Current oxide mining activities are
centred around Isabella North, Isabella South and McCays and are
summarised below. There are no mining activities at Bubi.
Mining
Pit
designs are based on the anticipated fleet likely to be used by the
oxide mining contractor and a result of pit optimisation based on
financial, technical, and geotechnical parameters. It is
anticipated that the deepest portions of the pits will be 50 m.
In-pit ramps and gradients are standardised based on equipment
type. Waste dumps are placed at closest possible distances from the
pits to reduce haulage distance.
The
Life of Mine “LoM” schedule has been developed to supply two
processing plants. These consist of McCays and Isabella at a
planned processing capacity of 25,000 t and 20,000 t of ore per
month respectively. The LoM schedule for McCays considers mining
from the Isabella North and McCays pits whilst that for Isabella
will be based on mining from Isabella South pit only.
Grade control is based on evaluation drilling and other sampling
methods such as blast hole and channel sampling in and around the
pits and a laboratory is available at the site for sample analysis.
ROM (run of mine) ore grade is determined from sampling of crushed
ore mined to the heap leach. There is limited exploration: mainly
percussion drilling and trenching in the targets around the pits to
support ongoing production.
A
mining contractor is used for all the open pit mining related
activities (drilling, blasting and earthmoving all included). The
mining is done using conventional truck and shovel method in 4-m
cuts typical of a shallow open pit mining operation.
Waste material is hauled with 60 or 4 t haul trucks (RDTs) and
dumped to designated waste dump locations and levelled with a
dozer. Ore material is loaded onto 30 or 40 t haul trucks (RDTs)
and tipped into the crushing facility or placed on the ROM pad
stockpile areas. Crushed ore material is hauled from the crushing
plant using 20 t rigid haul trucks dedicated for this onto ROM pad
areas for leaching.
The
operation is planned on a two 10-hour shift roster throughout the
year except on public holidays.
The
mining is planned to utilise mostly contractor equipment for the
bulk of the mining services with a few supporting equipment being
supplied by Bilboes Holdings. All the mining and related activities
are conducted by contractors, and these include drilling, blasting,
loading, and hauling activities. The key mining equipment is
supplied by the contractors and the support equipment is provided
by Bilboes Holdings. The key equipment is shared between three
mining areas to ensure optimum mining operations.
Process
The
process operation utilises two crushing plants at Isabella and
McCays, each with a throughput capacity of 45,000 t per month. The
mines are equipped with adsorption plants for the recovery of the
gold from leached solution from the ROM leach pads. The mines have
adequate leach pad space for the treatment of all the crushed ore
to be mined.
Ore
is transported to a crushing plant prior to being loaded onto heap
leach pads. The pads are irrigated with cyanide solution which
leaches the gold. The pregnant cyanide solution gravitates into
collection ponds and the gold is adsorbed by means of activated
carbon. The carbon is then eluted producing a gold eluant which is
electrowon and smelted to produce gold doré. Average gold
recoveries of 50 - 70% are expected to be achieved depending on the
extent of the oxidation of the ore.
Ore
is received from three main mining areas, namely Isabella South,
Isabella North and McCays pits, with production phased over the LoM
based on tonnage, proximity to the process plant and loading
capacity of the leach pads. Isabella South ore is treated at
Isabella plant whilst ore from McCays and Isabella North is treated
at McCays plant. Additional material from the Isabella South pit
during the later period of the LoM will be treated at McCays
plant.
Typical of heap leach operations, the process plant is divided into
three main areas:
| • |
|
Crushing (ore size reduction by
crushing to facilitate liberation of the gold for downstream
processes) |
| • |
|
Carbon in Solution (cyanidation
leaching on the leach pads and recovery of gold onto activated
carbon in the adsorption plant) |
| • |
|
Electrowinning and smelting
(adsorbed gold is further processed in the elution plant where it
is electrowon onto mild steel wool and digested in acid, processed
to a dry sludge, and smelted). Fouled carbon is reactivated using
an electric carbon regeneration kiln. |
The
elution and smelting process is centralised at Isabella plant.
Crushing Plants
McCays crushing plant is an open circuit comprising of a primary
crusher, screening plant and secondary crusher with a throughput
capacity of 45,000 t per month at a final particle size of -35 mm.
Isabella has a two-stage closed circuit crushing plant comprising
of a primary crusher, screening plant and secondary crusher with a
throughput capacity of 45,000 t per month at a final product size
of -25 mm.
The
two crushing plants have adequate capacity at the planned
throughput of 25,000 t and 20,000 t of ore per month for McCays and
Isabella production respectively.
Leach Pads
The
existing leach pad heights are 27 m and 21 m respectively for
Isabella and McCays although Isabella has a larger footprint in
comparison to McCays. The design leach pad height is 30 m leaving
ore loading capacity of 950,000 t for Isabella and 600,000 t for
McCays to a total of 1,550,000 t. All the oxide ore can
sufficiently be accommodated at the two leach pads and should there
be need to extend both Isabella and McCays have adequate space for
leach pads extensions.
Infrastructure
Housing, office, and workshop facilities are available to support
the mining operations.
Power supply is through the 11 kV line from the 33/11 kV 5 MVA
Motapa substation that supplies the area. With a historical monthly
average power outage factor of 5%. The mines have adequate back up
power in 2 X 700 kVA CAT generators that will be able to run the
two process plants respectively. The main sources of water for the
current operation are pit dewatering and a series of 12 boreholes
located across the claims area.
Labour
Mine
Employees
|
Level |
Permanent |
Contractors |
Total |
|
Senior Staff |
44 |
2 |
46 |
|
Junior Staff |
41 |
88 |
129 |
|
Total |
90 |
85 |
175 |
Total mine complement is at 175 and, of these, 90 are permanent
employees and 85 are contractors. Of the 44 senior staff, 22 come
from Bulawayo where their families stay but are housed at the mine
during the week. The rest of the skilled personnel reside at the
mine due to the nature of their work requiring shift work. A total
42 out of the 129 junior staff work from their homes in the nearby
local villages.
The
qualified persons responsible for the technical and scientific
information relating to the Bilboes project that is included or
incorporated by reference in this prospectus supplement are Mr Dana
Roets and Mr Craig Harvey.
For
a more detailed description of our business refer to “Item 4 –
Information on the Company” in our Annual Report on Form 20-F
for the year ended December 31, 2022. Our registered and head
office is located at B006 Millais House, Castle Quay, St. Helier,
Jersey, Channel Islands, JE2 3EF. Our African office for our South
African subsidiaries is located at 1 Quadrum office park,
4th floor, Johannesburg, Gauteng, 2198, South Africa. We
maintain a website at http://www.caledoniamining.com that contains
information about our company. Information on this web site is
not part of this Prospectus Supplement.
Summary of the
Offering
The following is a summary of the principal features of the
Offering and is subject to, and should be read together with, the
more detailed information, financial data and statements contained
elsewhere in, and incorporated by reference into, this Prospectus
Supplement and the accompanying Prospectus.
| Issuer |
Caledonia Mining
Corporation Plc |
| Securities Offered |
Common Shares having an aggregate
offering amount of up to $30,000,000. |
| Manner of Offering |
Sales of Common Shares, if any,
under this Prospectus Supplement and the accompanying Prospectus
will be made in transactions that are deemed to be “at the market
offerings” as defined in Rule 415(a)(4) of the Securities Act,
including, without limitation, sales made directly on NYSE American
or any other existing nationally recognized trading market for the
Common Shares in the United States, in negotiated transactions, at
market prices prevailing at the time of sale, or at prices relating
to such prevailing market prices and/or any other method permitted
by law. No Common Shares will be sold in Canada, or on any trading
markets in Canada as at-the-market distributions or otherwise. See
“Plan of Distribution”. |
| Use of Proceeds |
The net proceeds from the Offering,
to the extent raised, are expected to be used by the Company
primarily to develop the Bilboes sulphide project. See “Use of
Proceeds”. |
| Risk Factors |
See “Risk Factors” in this
Prospectus Supplement and the accompanying Prospectus and the risk
factors discussed or referred to in the documents incorporated by
reference in this Prospectus Supplement and the accompanying
Prospectus for a discussion of factors that should be read and
considered before investing in the Common Shares. |
| Listing |
NYSE American has authorized the
listing of up to 2,000,000 Common Shares. See “Plan of
Distribution”. |
| Tax Considerations |
Purchasing the Common Shares may
have tax consequences. This Prospectus Supplement and the
accompanying Prospectus may not describe these consequences fully
for all investors. Investors should read the tax discussion in this
Prospectus Supplement and accompanying Prospectus and consult with
their tax advisor. See “Certain United States Federal Income Tax
Considerations”. |
| Trading Symbols |
NYSE
American: CMCL
|
DIVIDENDS
From
2014, the Company has paid a quarterly dividend (payable at the end
of January, April, July and October each year, except for the
dividend expected to be paid in April 2020 which was delayed by a
month due to uncertainties related to the COVID-19 pandemic). The
quarterly dividend was 6.875 cents per share in 2019 and was
increased on several dates during 2020 and 2021. Dividends paid
over the last 3 years are as set out below:
|
Payment date |
cents
per share ($) |
|
January 25, 2019 |
6.875 |
|
April 26, 2019 |
6.875 |
|
July 26, 2019 |
6.875 |
|
October 25, 2019 |
6.875 |
|
January 31, 2020 |
7.500 |
|
May 29, 2020 |
7.500 |
|
July 31, 2020 |
8.500 |
|
October 30, 2020 |
10.000 |
|
January 29, 2021 |
11.000 |
|
April 30, 2021 |
12.000 |
|
July 30, 2021 |
13.000 |
|
October 29, 2021 |
14.000 |
|
January 28, 2022 |
14.000 |
|
April 29, 2022 |
14.000 |
|
July 29, 2022 |
14.000 |
|
October 28, 2022 |
14.000 |
|
January 27, 2022 |
14.000 |
|
April 28, 2023 |
14.000 |
The
Board will consider the continuation of the dividend and any future
increases in the dividend as appropriate in line with its prudent
approach to risk.
CONSOLIDATED CAPITALIZATION
Since May 15, 2023, the date of our most recently filed financial
statements, there has been no material change to our share
capital.
We
had 19,188,073 Common Shares, 20,000 stock options and 405,119
performance units outstanding as at May 16, 2023.
DILUTION
As
of March 31, 2023, our net tangible book value was $237.89 million,
or $13.17 per share. Net tangible book value is total assets minus
the sum of liabilities, intangible assets and non-controlling
interests. Net tangible book value per share is net tangible book
value divided by the total number of our Common Shares outstanding
as of March 31, 2023.
Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers of our
Common Shares in this Offering and the net tangible book value per
share of our Common Shares immediately after completion of this
Offering. Assuming that an aggregate of 2,284,844 Common
Shares are sold at an assumed offering price of $13.13 per share,
and after deducting the commissions and estimated Offering expenses
payable by us, our as-adjusted net tangible book value as of March
31, 2023 would have been approximately $266,590,000, or $13.10 per
share. This decreases the net tangible book value per share to
existing shareholders and immediate dilution in net tangible book
value of $0.03 per share to investors purchasing our Common Shares
in this Offering. The following table illustrates this dilution on
a per share basis:
|
Assumed public Offering price per share |
$ |
13.13 |
|
| Net tangible
book value per share as of March 31, 2023 |
$ |
13.17 |
|
| Decrease in
net tangible book value per share attributable to this
Offering |
$ |
0.07 |
|
| As adjusted
net tangible book value per share as of March 31, 2023 after giving
effect to this Offering |
$ |
13.10 |
|
| Dilution per
share to investor participating in this Offering |
$ |
0.03 |
|
The
table above assumes for illustrative purposes that an aggregate
of 2,284,844 Common Shares are sold during the term of the
Offering at an Offering price of $13.13 per share, which was the
last reported sale price of our Common Shares on the NYSE American
on May 16, 2023, for aggregate gross proceeds of approximately
$30,000,000. As of the date of this Prospectus Supplement, we have
applied to list up to 2,000,000 Common Shares on NYSE American. The
Common Shares subject to the Sales Agreement are being sold from
time to time at various prices. An increase of $2.00 per share in
the price at which the shares are sold from the assumed Offering
price of $13.13 per share shown in the table above, assuming all of
our Common Shares in the aggregate amount of approximately
$30,000,000 during the term of the Offering are sold at that price,
would increase our adjusted net tangible book value per share after
the Offering to $13.30 per share and would dilute the net tangible
book value per share to new investors in this Offering by $1.83 per
share, after deducting commissions and estimated aggregate Offering
expenses payable by us. A decrease of $2.00 per share in the price
at which the shares are sold from the assumed Offering price of
$13.13 per share shown in the table above, assuming all of our
Common Shares in the aggregate amount of $30,000,000 during the
term of the Offering are sold at that price, would decrease our
adjusted net tangible book value per share after the Offering to
$12.84 per share and would decrease the dilution in the net
tangible book value per share to new investors in this Offering by
$1.71 per share, after deducting commissions and estimated Offering
expenses payable by us. This information is supplied for
illustrative purposes only and may differ based on the actual
Offering price and the actual number of shares offered.
The
discussion and table above are based on 18,065,061 Common Shares
outstanding as of March 31, 2023, and excludes the following, in
each case as of such date:
|
· |
20,000 Common Shares issuable upon
the exercise of outstanding stock options having a weighted-average
exercise price of $8.18 per share; and |
|
· |
232,190 Common Shares which may be,
subject to election by the holder and the terms of the relevant
award agreement and as may be modified by the extent to which
performance conditions are met, issuable upon vesting and exercise
of outstanding performance units. |
To
the extent that any of these shares are issued upon exercise of
outstanding options, vesting and exercise of performance units or
otherwise, investors purchasing our Common Shares in this Offering
may experience further dilution. In addition, we may choose to
raise additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our
current or future operating plans. To the extent that we raise
additional capital through the sale of equity or convertible debt
securities, the issuance of these securities could result in
further dilution to our shareholders.
Subsequent to the quarter ended March 31, 2023, we issued 1,123,012
Common Shares pursuant to the closing of the Company’s placing of
Zimbabwe Depositary Receipts in Zimbabwe and the issuance of
deferred and escrow shares in connection with the Company’s
acquisition of Bilboes Gold, and our issued and outstanding
Common Shares as of May 16, 2023 were 19,188,073. On April 7, 2023
we issued a total of 79,894 and 93,035 performance units, the
former amount of which may be, subject to election by the holder
and the terms of the relevant award agreement and as may be
modified by the extent to which performance conditions are met,
issued in the form of Common Shares. The latter amount of
performance units are only issuable in the form of Common Shares
subject to the terms of the relevant award agreement and as may be
modified by the extent to which performance conditions are met.
USE OF PROCEEDS
The
net proceeds from the Offering are not determinable in light of the
nature of the distribution. The net proceeds of any given
distribution of Common Shares through the Agent in an “at the
market offering” will represent the gross proceeds after deducting
the applicable compensation payable to the Agent under the Sales
Agreement and the expenses of the distribution.
The
proceeds of the Offering are proposed to be used to fund the
development of the Bilboes sulphide project.
PLAN OF DISTRIBUTION
The
Company has entered into the Sales Agreement with the Agent under
which it may issue and sell from time to time Common Shares through
the Agent. Pursuant to this Prospectus Supplement, we may issue and
sell up to an additional $30,000,000 of Common Shares through the
Agent from and after the date hereof.
Sales of Common Shares, if any, will be made in transactions that
are deemed to be an “at the market offering” as defined in Rule
415(a)(4) promulgated under the Securities Act. Subject to the
terms and conditions of the Sales Agreement and upon instructions
from the Company, the Agent will use its commercially reasonable
efforts, consistent with its customary trading and sales practices
and applicable laws, to sell the Common Shares in accordance with
the parameters specified by the Company and as set out in the Sales
Agreement. The Common Shares will be distributed at market prices
prevailing at the time of the sale. As a result, prices may vary as
between purchasers and during the period of distribution.
The
Company will instruct the Agent as to the number of Common Shares
to be sold by the Agent from time to time by sending the Agent a
notice (each, a “Placement Notice”) that requests that the
Agent sell up to a specified dollar amount or a specified number of
Common Shares and specifies any parameters in accordance with which
the Company requires that the Common Shares be sold. The parameters
set forth in a Placement Notice shall not conflict with the
provisions of the Sales Agreement. The Company or the Agent may
suspend the offering of Common Shares upon proper notice and
subject to other conditions set forth in the Sales Agreement.
The
Company will pay the Agent for its services in acting as agent in
the sale of Common Shares, pursuant to the terms of the Sales
Agreement, compensation up to but not exceeding 3% of the gross
proceeds from sales of Common Shares made thereunder. The Agent
will be the only person or company paid an underwriting fee or
commission in connection with the Offering. The Company has also
agreed pursuant to the Sales Agreement to reimburse the Agent for
certain specified expenses, including the fees and expenses of
their legal counsel, in an amount not to exceed $75,000 but
excluding reasonable and documented taxes, disbursements other
charges and certain ongoing expenses. The Company estimates that
the total expenses that it will incur for the Offering (including
fees payable to stock exchanges, securities regulatory authorities,
its counsel and its auditors, but excluding compensation payable to
the Agent under the terms of the Sales Agreement) will be
approximately $400,000. Settlement for sales of Common Shares will
occur on the second business day following the date on which any
sales are made, or on such other date as is current industry
practice for regular-way trading, in return for payment of the net
proceeds to the Company. Sales of Common Shares as contemplated in
this Prospectus Supplement will be settled through the facilities
of The Depository Trust Company or by such other means as the
Company and the Agent may agree upon. There is no arrangement for
funds to be received in an escrow, trust or similar
arrangement.
In
connection with the sale of the Common Shares on behalf of the
Company, the Agent will be deemed an “underwriter” as defined in
applicable securities legislation under the Securities Act, and the
compensation of the Agent will be deemed to be underwriting
commissions or discounts.
The
Company has agreed to provide indemnification and contribution to
the Agent against, among other things, certain civil liabilities,
including liabilities under the Securities Act.
The
offering of Common Shares pursuant to the Sales Agreement will
terminate in accordance with the terms of the Sales Agreement. The
Agent may terminate the Sales Agreement under the circumstances
specified in the Sales Agreement. The Company and the Agent may
also terminate the Sales Agreement upon giving the other party ten
(10) days’ notice. In addition, the Company may terminate the Sales
Agreement by providing the Agent five (5) days’ notice when no
Placement Notice is in effect.
The
Agent and its respective affiliates may in the future provide
various investment banking, commercial banking and other financial
services for us and our affiliates, for which services they may in
the future receive customary fees. To the extent required by
Regulation M under the Exchange Act, the Agent will not engage in
any market making activities involving our Common Shares while the
Offering is ongoing under this Prospectus Supplement. In the course
of its business, the Agent may actively trade the Company’s
securities for the Agent’s own account or for the account of
customers and, accordingly, the Agent may at any time hold long or
short positions in the Company’s securities.
This
Prospectus Supplement and the accompanying Prospectus in electronic
format may be made available on websites maintained by the Agent,
and the Agent may distribute this Prospectus Supplement and the
accompanying Prospectus electronically.
DESCRIPTION OF SECURITIES BEING
OFFERED
The
Offering consists of Common Shares having an aggregate offering
price of up to $30,000,000.
Common Shares
As
of May 16, 2023, there were 19,188,073 Common Shares issued and
outstanding.
The
holders of our Common Shares are entitled to receive notice of all
shareholder meetings and to attend and vote at such meetings.
Certificates representing the Common Shares are issued in
registered form. Registered shareholders are entitled to one vote
for each Common Share held on all matters to be voted on by the
shareholders. Each Common Share is equal to every other Common
Share and, subject to the rights of holders of shares ranking
senior to the Common Shares, if any, each Common Share is entitled
to receive pro rata such dividends as may be declared by the board
of directors out of funds legally available therefor and to
participate equally in the event of our liquidation, dissolution or
winding up, whether voluntary or involuntary, or any other
distribution of our assets among the shareholders for the purpose
of winding up our affairs after we have paid out our liabilities.
Common Shares are not subject to call or assessment. There are no
pre-emptive or conversion rights, and no provisions at this time
for redemption, purchase or cancellation, surrender, sinking fund
or purchase fund. In addition, there are no provisions in our
articles of association discriminating against any existing or
prospective holders of such securities as a result of a shareholder
owning a substantial number of shares.
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSIDERATIONS
The following is a general summary of certain material U.S. federal
income tax considerations applicable to a U.S. Holder (as defined
below) arising from and relating to the acquisition, ownership, and
disposition of Common Shares acquired pursuant to this
Offering.
This summary is for general information purposes only and does not
purport to be a complete analysis or listing of all potential U.S.
federal income tax considerations that may apply to a U.S. Holder
arising from and relating to the acquisition, ownership, and
disposition of Common Shares acquired pursuant to this Offering. In
addition, this summary does not take into account the individual
facts and circumstances of any particular U.S. Holder that may
affect the U.S. federal income tax consequences to such U.S.
Holder, including without limitation specific tax consequences to a
U.S. Holder under an applicable income tax treaty. Accordingly,
this summary is not intended to be, and should not be construed as,
legal or U.S. federal income tax advice with respect to any U.S.
Holder. This summary does not address the U.S. federal net
investment income, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and non-U.S. tax
consequences to U.S. Holders of the acquisition, ownership, and
disposition of Common Shares. In addition, except as specifically
set forth below, this summary does not discuss applicable tax
reporting requirements. Each prospective U.S. Holder should consult
its own tax advisors regarding the U.S. federal, U.S. federal net
investment income, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and non-U.S. tax
consequences relating to the acquisition, ownership, and
disposition of Common Shares acquired pursuant to this
Offering.
No
ruling from the Internal Revenue Service (the “IRS”) has
been requested, or will be obtained, regarding the U.S. federal
income tax consequences of the acquisition, ownership, and
disposition of Common Shares acquired pursuant to this Offering.
This summary is not binding on the IRS, and the IRS is not
precluded from taking a position that is different from, and
contrary to, the positions taken in this summary. In addition,
because the authorities on which this summary is based are subject
to various interpretations, the IRS and the U.S. courts could
disagree with one or more of the conclusions described in this
summary.
Scope of this Summary
Authorities
This summary is based on the Internal Revenue Code of 1986, as
amended (the “Code”), Treasury Regulations (whether final,
temporary, or proposed), published rulings of the IRS, published
administrative positions of the IRS, and U.S. court decisions that
are applicable and, in each case, as in effect and available, as of
the date of this document. Any of the authorities on which this
summary is based could be changed in a material and adverse manner
at any time, and any such change could be applied on a retroactive
or prospective basis which could affect the U.S. federal income tax
considerations described in this summary. This summary does not
discuss the potential effects, whether adverse or beneficial, of
any proposed legislation that, if enacted, could be applied on a
retroactive, current or prospective basis.
U.S. Holders
For purposes of this summary, the term “U.S. Holder” means a
beneficial owner of Common Shares acquired pursuant to this
Offering that is for U.S. federal income tax purposes:
|
· |
an
individual who is a citizen or resident of the U.S.; |
|
· |
a
corporation (or other entity taxable as a corporation for U.S.
federal income tax purposes) organized under the laws of the U.S.,
any state thereof or the District of Columbia; |
|
· |
an estate
whose income is subject to U.S. federal income taxation regardless
of its source; or |
|
· |
a trust that
(1) is subject to the primary supervision of a court within the
U.S. and the control of one or more U.S. persons for all
substantial decisions or (2) has a valid election in effect under
applicable Treasury Regulations to be treated as a U.S.
person. |
U.S. Holders Subject to Special U.S. Federal Income Tax Rules
Not Addressed
This summary does not address the U.S. federal income tax
considerations applicable to U.S. Holders that are subject to
special provisions under the Code, including, but not limited to,
the following U.S. Holders that: (a) are tax-exempt organizations,
qualified retirement plans, individual retirement accounts, or
other tax-deferred accounts; (b) are financial institutions,
underwriters, insurance companies, real estate investment trusts,
or regulated investment companies; (c) are broker-dealers, dealers,
or traders in securities or currencies that elect to apply a
mark-to-market accounting method; (d) have a “functional currency”
other than the U.S. dollar; (e) own Common Shares as part of a
straddle, hedging transaction, conversion transaction, constructive
sale, or other integrated transaction; (f) acquire Common Shares in
connection with the exercise of employee stock options or otherwise
as compensation for services; (g) hold Common Shares other than as
a capital asset within the meaning of Section 1221 of the Code
(generally, property held for investment purposes); (h) are
partnerships and other pass-through entities (and investors in such
partnerships and entities); (i) are S corporations (and Common
Shareholders or investors in such S corporations); (j) own, have
owned or will own (directly, indirectly, or by attribution) 10% or
more of the total combined voting power or value of the outstanding
Common Shares of the Company; (k) are U.S. expatriates or former
long-term residents of the U.S., (l) hold Common Shares in
connection with a trade or business, permanent establishment, or
fixed base outside the United States, or (m) are subject to special
tax accounting rules with respect to Common Shares. U.S. Holders
that are subject to special provisions under the Code, including,
but not limited to, U.S. Holders described immediately above,
should consult their own tax advisors regarding the U.S. federal,
U.S. federal net investment income, U.S. federal alternative
minimum, U.S. federal estate and gift, U.S. state and local, and
non-U.S. tax consequences relating to the acquisition, ownership
and disposition of Common Shares.
If
an entity or arrangement that is classified as a partnership (or
other “pass-through” entity) for U.S. federal income tax purposes
holds Common Shares, the U.S. federal income tax consequences to
such entity and the partners (or other owners) of such entity
generally will depend on the activities of the entity and the
status of such partners (or owners). This summary does not address
the tax consequences to any such partner (or owner). Partners (or
other owners) of entities or arrangements that are classified as
partnerships or as “pass-through” entities for U.S. federal income
tax purposes should consult their own tax advisors regarding the
U.S. federal income tax consequences arising from and relating to
the acquisition, ownership, and disposition of Common Shares.
Ownership and Disposition of Common Shares
The following discussion is subject in its entirety to the rules
described below under the heading “Passive Foreign Investment
Company Rules”.
Taxation of Distributions
A
U.S. Holder that receives a distribution, including a constructive
distribution, with respect to a Common Share will be required to
include the amount of such distribution in gross income as a
dividend (without reduction for any foreign income tax withheld
from such distribution) to the extent of the current or accumulated
“earnings and profits” of the Company, as computed for U.S. federal
income tax purposes. A dividend generally will be taxed to a U.S.
Holder at ordinary income tax rates if the Company is a PFIC (as
defined below) for the tax year of such distribution or the
preceding tax year. To the extent that a distribution exceeds the
current and accumulated “earnings and profits” of the Company, such
distribution will be treated first as a tax-free return of capital
to the extent of a U.S. Holder’s tax basis in the Common Shares and
thereafter as gain from the sale or exchange of such Common Shares
(see “Sale or Other Taxable Disposition of Common Shares” below).
However, the Company may not maintain the calculations of its
earnings and profits in accordance with U.S. federal income tax
principles, and each U.S. Holder may have to assume that any
distribution by the Company with respect to the Common Shares will
constitute ordinary dividend income. Dividends received on Common
Shares by corporate U.S. Holders generally will not be eligible for
the “dividends received deduction”. Subject to applicable
limitations and provided the Common Shares are readily tradable on
a United States securities market, dividends paid by the Company to
non-corporate U.S. Holders, including individuals, generally will
be eligible for the preferential tax rates applicable to long-term
capital gains for dividends, provided certain holding period and
other conditions are satisfied, including that the Company not be
classified as a PFIC (as defined below) in the tax year of
distribution or in the preceding tax year. The dividend rules are
complex, and each U.S. Holder should consult its own tax advisors
regarding the application of such rules.
Sale or Other Taxable Disposition of Common Shares
A
U.S. Holder will generally recognize gain or loss on the sale or
other taxable disposition of Common Shares in an amount equal to
the difference, if any, between (a) the amount of cash plus the
fair market value of any property received and (b) such U.S.
Holder’s tax basis in such Common Shares sold or otherwise disposed
of. Any such gain or loss recognized on such sale or other
disposition generally will be capital gain or loss, which will be
long-term capital gain or loss if, at the time of the sale or other
disposition, such Common Shares are held for more than one
year.
Preferential tax rates apply to long-term capital gains of a U.S.
Holder that is an individual, estate, or trust. There are currently
no preferential tax rates for long-term capital gains of a U.S.
Holder that is a corporation. Deductions for capital losses are
subject to significant limitations under the Code.
Passive Foreign Investment Company (“PFIC”)
Rules
If
the Company were to constitute a PFIC for any year during a U.S.
Holder’s holding period, then certain potentially adverse rules
would affect the U.S. federal income tax consequences to a U.S.
Holder resulting from the acquisition, ownership and disposition of
Common Shares. The Company believes that it was not a PFIC for its
most recently completed tax year, and based on current business
plans and financial expectations, the Company expects that it will
not be a PFIC for the current tax year and expects that it will not
be a PFIC for the foreseeable future. No opinion of legal counsel
or ruling from the IRS concerning the status of the Company as a
PFIC has been obtained or is currently planned to be requested.
However, PFIC classification is fundamentally factual in nature,
generally cannot be determined until the close of the tax year in
question and is determined annually. Additionally, the analysis
depends, in part, on the application of complex U.S. federal income
tax rules, which are subject to differing interpretations.
Consequently, there can be no assurance that the Company has never
been and will not become a PFIC for any tax year during which U.S.
Holders hold Common Shares.
In
addition, in any year in which the Company is classified as a PFIC,
a U.S. Holder will be required to file an annual report with the
IRS containing such information as Treasury Regulations and/or
other IRS guidance may require. In addition to penalties, a failure
to satisfy such reporting requirements may result in an extension
of the time period during which the IRS can assess a tax. U.S.
Holders should consult their own tax advisors regarding the
requirements of filing such information returns under these rules,
including the requirement to file an IRS Form 8621 annually.
The Company generally will be a PFIC under Section 1297 of the Code
if, after the application of certain “look-through” rules with
respect to subsidiaries in which the Company holds at least 25% of
the value of such subsidiary, for a tax year, (a) 75% or more of
the gross income of the Company for such tax year is passive income
(the “income test”) or (b) 50% or more of the value of the
Company’s assets either produce passive income or are held for the
production of passive income (the “asset test”), based on the
quarterly average of the fair market value of such assets. “Gross
income” generally includes all sales revenues less the cost of
goods sold, plus income from investments and incidental or outside
operations or sources, and “passive income” generally includes, for
example, dividends, interest, certain rents and royalties, certain
gains from the sale of stock and securities, and certain gains from
commodities transactions. Active business gains arising from the
sale of commodities generally are excluded from passive income if
substantially all of a foreign corporation’s commodities are stock
in trade or inventory, depreciable property used in a trade or
business or supplies regularly used or consumed in the ordinary
course of its trade or business, and certain other requirements are
satisfied.
If
the Company were a PFIC in any tax year during which a U.S. Holder
held Common Shares, such holder generally would be subject to
special rules with respect to “excess distributions” made by the
Company on the Common Shares and with respect to gain from the
disposition of Common Shares. An “excess distribution” generally is
defined as the excess of distributions with respect to the Common
Shares received by a U.S Holder in any tax year over 125% of the
average annual distributions such U.S. Holder has received from the
Company during the shorter of the three preceding tax years, or
such U.S. Holder’s holding period for the Common Shares. Generally,
a U.S. Holder would be required to allocate any excess distribution
or gain from the disposition of the Common Shares ratably over its
holding period for the Common Shares. Such amounts allocated to the
year of the disposition or excess distribution would be taxed as
ordinary income, and amounts allocated to prior tax years would be
taxed as ordinary income at the highest tax rate in effect for each
such year and an interest charge at a rate applicable to
underpayments of tax would apply.
While there are U.S. federal income tax elections that sometimes
can be made to mitigate these adverse tax consequences (including
the “QEF Election” under Section 1295 of the Code and the
“Mark-to-Market Election” under Section 1296 of the Code),
such elections are available in limited circumstances and must be
made in a timely manner.
U.S. Holders should be aware that, for each tax year, if any, that
the Company is a PFIC, the Company can provide no assurances that
it will satisfy the record-keeping requirements of a PFIC, or that
it will make available to U.S. Holders the information such U.S.
Holders require to make a QEF Election with respect to the Company
or any subsidiary that also is classified as a PFIC.
Certain additional adverse rules may apply with respect to a U.S.
Holder if the Company is a PFIC, regardless of whether the U.S.
Holder makes a QEF Election. These rules include special rules that
apply to the amount of foreign tax credit that a U.S. Holder may
claim on a distribution from a PFIC. Subject to these special
rules, foreign taxes paid with respect to any distribution in
respect of stock in a PFIC are generally eligible for the foreign
tax credit. U.S. Holders should consult their own tax advisors
regarding the potential application of the PFIC rules to the
ownership and disposition of Common Shares, and the availability of
certain U.S. tax elections under the PFIC rules.
Additional Considerations
Receipt of Foreign Currency
The amount of any distribution paid to a U.S. Holder in foreign
currency, or payment received on the sale, exchange or other
taxable disposition of Common Shares, generally will be equal to
the U.S. dollar value of such foreign currency based on the
exchange rate applicable on the date of receipt (regardless of
whether such foreign currency is converted into U.S. dollars at
that time). A U.S. Holder will have a basis in the foreign currency
equal to its U.S. dollar value on the date of receipt. Any U.S.
Holder who converts or otherwise disposes of the foreign currency
after the date of receipt may have a foreign currency exchange gain
or loss that would be treated as ordinary income or loss, and
generally will be U.S. source income or loss for foreign tax credit
purposes. Different rules apply to U.S. Holders who use the accrual
method with respect to foreign currency received upon the sale,
exchange or other taxable disposition of the Common Shares. Each
U.S. Holder should consult its own tax advisors regarding the U.S.
federal income tax consequences of receiving, owning, and disposing
of foreign currency.
Foreign Tax Credit
Dividends paid on the Common Shares will be treated as
foreign-source income, and generally will be treated as “passive
category income” or “general category income” for U.S. foreign tax
credit purposes. The Code applies various complex limitations on
the amount of foreign taxes that may be claimed as a credit by U.S.
taxpayers. In addition, Treasury Regulations that apply to taxes
paid or accrued (the “Foreign Tax Credit Regulations”)
impose additional requirements for non-U.S. withholding taxes to be
eligible for a foreign tax credit, and there can be no assurance
that those requirements will be satisfied.
Subject to the PFIC rules and the Foreign Tax Credit Regulations,
each as discussed above, a U.S. Holder that pays (whether directly
or through withholding) foreign income tax with respect to
dividends paid on the Common Shares generally will be entitled, at
the election of such U.S. Holder, to receive either a deduction or
a credit for such foreign income tax. Generally, a credit will
reduce a U.S. Holder’s U.S. federal income tax liability on a
dollar-for-dollar basis, whereas a deduction will reduce a U.S.
Holder’s income subject to U.S. federal income tax. This election
is made on a year-by-year basis and applies to all foreign taxes
paid (whether directly or through withholding) by a U.S. Holder
during a year. The foreign tax credit rules are complex and involve
the application of rules that depend on a U.S. Holder’s particular
circumstances. Each U.S. Holder should consult its own tax advisors
regarding the foreign tax credit rules.
Backup
Withholding and Information Reporting
Under U.S. federal income tax law and Treasury Regulations, certain
categories of U.S. Holders must file information returns with
respect to their investment in, or involvement in, a foreign
corporation. For example, U.S. return disclosure obligations (and
related penalties) are imposed on individuals who are U.S. Holders
that hold certain specified foreign financial assets in excess of
certain threshold amounts. The definition of specified foreign
financial assets includes not only financial accounts maintained in
foreign financial institutions, but also, unless held in accounts
maintained by a financial institution, any stock or security issued
by a non-U.S. person, any financial instrument or contract held for
investment that has an issuer or counterparty other than a U.S.
person and any interest in a foreign entity. U.S. Holders may be
subject to these reporting requirements unless their Common Shares
are held in an account at certain financial institutions. Penalties
for failure to file certain of these information returns are
substantial. U.S. Holders should consult their own tax advisors
regarding the requirements of filing information returns, including
the requirement to file an IRS Form 8938.
Payments made within the U.S. or by a U.S. payor or U.S. middleman,
of dividends on, and proceeds arising from the sale or other
taxable disposition of, Common Shares will generally be subject to
information reporting and backup withholding tax, currently at the
rate of 24%, if a U.S. Holder (a) fails to furnish such U.S.
Holder’s correct U.S. taxpayer identification number (generally on
IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S.
Holder has previously failed to properly report items subject to
backup withholding tax, or (d) fails to certify, under penalty of
perjury, that such U.S. Holder has furnished its correct U.S.
taxpayer identification number and that the IRS has not notified
such U.S. Holder that it is subject to backup withholding tax.
However, certain exempt persons generally are excluded from these
information reporting and backup withholding rules. Backup
withholding is not an additional tax. Any amounts withheld under
the U.S. backup withholding tax rules generally will be allowed as
a credit against a U.S. Holder’s U.S. federal income tax liability,
if any, or will be refunded, if such U.S. Holder furnishes required
information to the IRS in a timely manner.
The discussion of reporting requirements set forth above is not
intended to constitute a complete description of all reporting
requirements that may apply to a U.S. Holder. A failure to satisfy
certain reporting requirements may result in an extension of the
time period during which the IRS can assess a tax, and under
certain circumstances, such an extension may apply to assessments
of amounts unrelated to any unsatisfied reporting requirement. Each
U.S. Holder should consult its own tax advisors regarding the
information reporting and backup withholding rules.
THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE
ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH
RESPECT TO THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF COMMON
SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO
THE TAX CONSIDERATIONS APPLICABLE TO THEM IN LIGHT OF THEIR OWN
PARTICULAR CIRCUMSTANCES.
EXPERTS
Our consolidated financial statements as of December 31, 2022, 2021
and 2020 have been incorporated by reference herein in reliance
upon the report of BDO South Africa Inc., independent registered
public accounting firm, and upon the authority of said firm as
experts in accounting and auditing.
Mr. Dana Roets (B Eng (Min), MBA, Pr. Eng, FSAIMM, AMMSA), an
officer and employee in the Company’s group, and Mr. Craig Harvey
((NHD Econ. Geology, MGSSA (966008), MAIG (5485)), an employee in
the Company’s group, are the Company’s qualified persons as defined
by Subpart 1300 and NI 43-101. Unless otherwise indicated, Messrs.
Roets and Harvey are responsible for all scientific and technical
information included and incorporated by reference in this
prospectus supplement. Messrs. Roets and Harvey have reviewed such
information and have approved the disclosure of this information
for the purposes of this prospectus supplement.
Certain experts named in this Prospectus Supplement, including
Messrs. Roets and Harvey, are employees in the Company’s
group. Messrs. Roets and Harvey and any other experts named
in this Prospectus Supplement serving as officers, directors or
employees, may own Common Shares of the Company and may participate
in the Company’s share-based compensation plans pursuant to the
terms of such plans.
LEGAL MATTERS
Certain legal matters relating to the offering of the Common Shares
hereunder will be passed upon on our behalf by Mourant Ozannes
(“Mourant”) with respect to Jersey legal matters. Mourant’s
Jersey office is located at 22 Grenville Street, St Helier, Jersey
JE4 8PX, Channel Islands. In addition, certain legal matters in
connection with the Offering under this Prospectus Supplement will
be passed upon on behalf of the Agent by Dentons Canada LLP,
Toronto, Ontario, as to Canadian legal matters, and by Dentons US
LLP, New York, New York, as to United States legal matters.
AVAILABLE INFORMATION
We
are a public company that files annual, quarterly and special
reports, proxy statements and other information with Canadian
securities regulatory authorities and the SEC. The documents we
file with, or furnish to, the SEC are electronically available from
the SEC’s EDGAR and may be accessed at www.sec.gov.
CALEDONIA MINING CORPORATION PLC
$100,000,000
Common Shares
Preference Shares
Units
Warrants to Purchase Shares
Caledonia Mining Corporation Plc (the “Company,”
“Caledonia,” “we,” “us” or “our”) may
offer and issue from time to time (the “Offering”) common
shares (“Common Shares”) of our Company, preference shares
(“Preference Shares” and together with Common Shares
“Shares”) of our Company, warrants to purchase Shares
(“Warrants”) and units consisting of Shares and whole or
partial Warrants (“Units”, and together with the Common
Shares, the Preference Shares and the Warrants, the
“Securities”) or any combination thereof for up
to an aggregate initial offering price of $100,000,000 (or the
equivalent thereof in other currencies) during the 36 month period
that this short form base shelf prospectus (the
“Prospectus”), including any amendments hereto, remains
effective. Securities may be offered separately or
together, in amounts, at prices and on terms to be determined based
on market conditions at the time of sale as set forth in an
accompanying prospectus supplement (a “Prospectus
Supplement”).
The specific terms of the Securities with respect to a particular
Offering will be set out in the applicable Prospectus Supplement
and may include, where applicable (i) in the case of Shares,
the number of Shares offered, the offering price, whether the
Shares are being offered for cash, and any other terms specific to
the Shares being offered, (ii) in the case of Warrants, the
offering price, whether the Warrants are being offered for cash,
the designation, the number and the terms of the Shares purchasable
upon exercise of the Warrants, any procedures that will result in
the adjustment of these numbers, the exercise price, the dates and
periods of exercise and any other terms specific to the Warrants
being offered, and (iii) in the case of Units, the number of
Units offered, the offering price of the Units, the number,
designation and terms of the Shares and Warrants comprising the
Units and any procedures that will result in the adjustment of
those numbers and any other specific terms applicable to the
offering of Units. Where required by statute, regulation
or policy, and where Securities are offered in currencies other
than United States dollars, appropriate disclosure of foreign
exchange rates applicable to the Securities will be included in the
Prospectus Supplement describing the Securities.
All shelf information permitted under applicable law to be omitted
from this Prospectus will be contained in one or more Prospectus
Supplements that will be delivered to purchasers together with this
Prospectus.
This Prospectus constitutes a public offering of the Securities
only in those jurisdictions where they may be lawfully offered for
sale and only by persons permitted to sell the Securities in those
jurisdictions. We may offer and sell Securities to, or
through, underwriters or dealers and also may offer and sell
certain Securities directly to other purchasers or through agents
pursuant to exemptions from registration or qualification under
applicable securities laws. A Prospectus Supplement
relating to each issue of Securities offered thereby will set forth
the names of any underwriters, dealers, or agents involved in the
Offering and sale of the Securities and will set forth the terms of
the Offering of the Securities, the method of distribution of the
Securities including, to the extent applicable, the proceeds we
will receive and any fees, discounts or any other compensation
payable to underwriters, dealers or agents and any other material
terms of the plan of distribution.
The outstanding Common Shares are listed on the NYSE American (the
“NYSE American”) under the symbol “CMCL” and depositary
interests in the Common Shares are admitted to trading on AIM of
the London Stock Exchange (the “AIM”) under the symbol
“CMCL”. On April 23, 2021 (the last trading day prior to
the date of this Prospectus), the closing price of (a) the Common
Shares on (i) the NYSE American was $14.37; and (b) the depositary
interests in the Common Shares on AIM was £10.75. We
will apply to have any Common Shares distributed under this
Prospectus listed on the NYSE American and depositary interests
representing them admitted to trading on AIM provided those types
of securities are currently listed or traded on such
exchanges. Any listing and admission will be subject to
Caledonia fulfilling all of the listing requirements of the NYSE
American and the AIM Rules for Companies,
respectively. Unless otherwise specified in the
applicable Prospectus Supplement, no Securities, other than Common
Shares, will be listed or admitted to trading on any securities
exchange.
Our principal executive offices are located at B006 Millais House,
Castle Quay, St Helier, Jersey JE2 3EF (telephone +44 1534
679800).
Neither the SEC nor any state securities commission has approved
or disapproved these securities or passed upon the adequacy or
accuracy of this Prospectus. Any representation to the contrary is
a criminal offense.
Investing in the Securities involves a high degree of risk and
must be considered speculative due to the nature of our business
and the present stage of exploration of our mineral
properties. Prospective purchasers of the Securities
should carefully consider all the information in this Prospectus
and in the documents incorporated by reference in this
Prospectus. See “Risk Factors” beginning on page 5 of
this Prospectus.
You should rely only on the information contained in or
incorporated by reference into this Prospectus or any Prospectus
Supplement. References to this “Prospectus” include
documents incorporated by reference therein. See
“Documents Incorporated by Reference”. The information
in or incorporated by reference into this Prospectus is current
only as of its date. We have not authorized anyone to
provide you with information that is different. This
document may only be used where it is legal to offer these
Securities.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING INFORMATION
Forward-looking Statements
This Prospectus, including the documents incorporated by reference
herein, contains forward-looking statements and forward-looking
information (collectively, “forward-looking statements”)
within the meaning of United States securities laws relating to us
that are based on the beliefs and estimates of our management as
well as assumptions made by and information currently available to
us. Such forward-looking statements include, but are not
limited to statements concerning:
| · |
the completion of the
Offering; |
| · |
the use of proceeds of the
Offering; |
| · |
our plans for our mineral
properties; |
| · |
the future price of
minerals; |
| · |
market events and
conditions; |
| · |
the estimation of mineral
reserves and mineral resources; |
| · |
estimates of the time and amount
of future minerals production for specific operations; |
| · |
estimated future exploration
expenditures and other expenses for specific
operations; |
| · |
requirements for additional
capital; |
| · |
currency fluctuations;
and |
| · |
environmental risks and
reclamation costs. |
When used in this Prospectus, any statements that express or
involve discussions with respect to predictions, beliefs, plans,
projections, objectives, assumptions or future events or
performance (often but not always using words or phrases such as
“anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”,
“strategy”, “goals”, “objectives”, “project”, “potential” or
variations thereof or stating that certain actions, events, or
results “may”, “could”, “would”, “might” or “will” be taken, occur,
or be achieved, or the negative of any of these terms and similar
expressions), as they relate to us or our management, are intended
to identify forward-looking statements.
Such forward-looking statements reflect our current views with
respect to future events and are subject to certain known and
unknown risks, uncertainties and assumptions. Many
factors could cause actual results, performance, or achievements to
be materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, among others:
| · |
risks relating to our ability to
finance the exploration and development of our mineral
properties; |
| · |
risks relating to our exploration
of our mineral properties and business activities; |
| · |
risks and uncertainties relating
to the interpretation of exploration results, geology, grade and
continuity of our mineral deposits; |
| · |
risks related to differences
between United States and Canadian practices for reporting mineral
resources and reserves; |
| · |
risks related to title to our
mineral properties and the ability to obtain the required mining
leases and permits to develop our mineral properties; |
| · |
risks related to mining
operations in Zimbabwe; |
| · |
commodity price
fluctuations; |
| · |
risks related to the price and
volume volatility of the Common Shares; |
| · |
risks related to governmental
regulations, including environmental regulations and possible
changes thereto; |
| · |
risks related to possible
reclamation activities on our properties; |
| · |
our ability to attract and retain
qualified management and our dependence upon such management in the
development of our mineral properties and potential conflicts of
interest involving such management; |
| · |
risks related to the ability to
maintain the listing of the Common Shares on the NYSE
American; |
| · |
increased competition in the
exploration industry; and |
| · |
uncertainties regarding the impact of the novel coronavirus 2019
(“COVID-19”) pandemic on domestic and global economic conditions,
demand for mining, our workforce, whether due to illness or
restrictions on movement, and on the price of our Common
Shares.
|
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those described herein. This list
is not exhaustive of the factors that may affect any of our
forward-looking statements. Forward-looking statements
are statements about the future and are inherently uncertain, and
our actual achievements or other future events or conditions may
differ materially from those reflected in the forward-looking
statements due to a variety of risks, uncertainties and other
factors, including, without limitation, those referred to in this
document under the heading “Risk Factors”, in the 20-F (as defined
below) and elsewhere. The forward-looking statements in
this Prospectus are based on the reasonable beliefs, expectations
and opinions of management on the date the forward-looking
statements are made, and, except as required by law, we do not
assume any obligation to update forward-looking statements if
circumstances or our management’s beliefs, expectations or opinions
should change.
For the reasons set forth above, investors should not attribute
undue certainty to or place undue reliance on forward-looking
statements.
Additional risks and uncertainties relating to us and our business
can be found in the “Risk Factors” section of this Prospectus and
in any applicable Prospectus Supplement, as well as in our other
documents incorporated by reference herein.
AVAILABLE INFORMATION
We file reports and other information with the securities
commissions and similar regulatory authorities in the provinces of
Canada (collectively, the “Commissions”). These
reports and information are available to the public free of charge
on SEDAR at www.sedar.com.
We have filed a registration statement on Form F-3 relating to the
Securities with the SEC (the “Registration
Statement”). This Prospectus, which constitutes a
part of the Registration Statement, does not contain all of the
information contained in the Registration Statement, certain items
of which are contained in the exhibits to the Registration
Statement as permitted by the rules and regulations of the
SEC. Statements included in this Prospectus or
incorporated herein by reference about the contents of any
contract, agreement or other documents referred to are not
necessarily complete, and in each instance investors should refer
to the exhibits for a more complete description of the matter
involved. Each such statement is qualified in its
entirety by such reference. Copies of the documents
incorporated herein by reference may be obtained on request, orally
or in writing, without charge, from our Company Secretary at B006
Millais House, Castle Quay, St Helier, Jersey JE2 3EF (telephone
+44 1534 679800). Copies of the documents referred to in
this Prospectus, or in the Registration Statement, may be inspected
at our registered office at B006 Millais House, Castle Quay, St
Helier, Jersey JE2 3EF during normal business hours.
We are subject to the information requirements of the U.S.
Securities Exchange Act of 1934, as amended (the
“U.S. Exchange Act”), relating to foreign private
issuers and applicable Canadian securities legislation and, in
accordance therewith, file reports and other information with the
SEC and securities regulatory authorities in Canada. As
a foreign private issuer, we are exempt from the rules under the
U.S. Exchange Act prescribing the furnishing and content of proxy
statements, and our officers, directors and principal shareholders
are exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the U.S. Exchange
Act.
Investors may read and download some of the documents we have filed
with the SEC’s Electronic Data Gathering and Retrieval system at
www.sec.gov.
Readers should rely only on
information contained or incorporated by reference in this
Prospectus and any applicable Prospectus Supplement. We
have not authorized anyone to provide the reader with different
information. We are not making an offer of the
Securities in any jurisdiction where the offer is not
permitted. Readers should not assume that the
information contained in this Prospectus is accurate as of any date
other than the date on the front of this Prospectus, unless
otherwise noted herein or as required by law. It should
be assumed that the information appearing in this Prospectus and
the documents incorporated herein by reference are accurate only as
of their respective dates. Our business, financial
condition, results of operations and prospects may have changed
since those dates.
DOCUMENTS INCORPORATED BY
REFERENCE
Information has been incorporated by reference in this
Prospectus from documents filed with the Commissions and filed
with, or furnished to, the SEC. Each
person, including any beneficial owner to whom this prospectus is
delivered, may request, orally or in writing, a copy of these
documents, which will be provided at no cost by contacting our
Company Secretary at B006 Millais House, Castle Quay, St Helier,
Jersey JE2 3EF (telephone +44 1534
679800). Copies of these documents are also
available through the Internet on the System for Electronic
Document Analysis and Retrieval, which can be accessed online at
www.sedar.com and on the SEC’s Electronic Data Gathering and
Retrieval System at www.sec.gov. We maintain a corporate
website at www.caledoniamining.com.
The following documents, which we filed or furnished with the
Commissions and the SEC, as applicable, are specifically
incorporated by reference into, and form an integral part of, this
Prospectus:
In addition, this Prospectus shall also be deemed to incorporate by
reference all subsequent annual reports filed on Form 20-F,
Form 40-F or Form 10-K, and all subsequent filings on
Forms 10-Q and 8-K filed by us pursuant to the U.S. Exchange
Act prior to the termination of the Offering made by this
Prospectus. We may incorporate by reference into this
Prospectus any Form 6-K that is submitted to the SEC after the
date of the filing of the registration statement of which this
Prospectus forms a part and before the date of termination of this
Offering. Any such Form 6-K that we intend to so
incorporate shall state in such form that it is being incorporated
by reference into this Prospectus. The documents
incorporated or deemed to be incorporated herein by reference
contain meaningful and material information relating to us and the
readers should review all information contained in this Prospectus
and the documents incorporated or deemed to be incorporated herein
by reference.
A Prospectus Supplement containing the specific terms of an
Offering of Securities and other information relating to the
Securities will be delivered to prospective purchasers of such
Securities together with this Prospectus and will be deemed to be
incorporated into this Prospectus as of the date of such Prospectus
Supplement only for the purpose of the Offering of the Securities
covered by that Prospectus Supplement.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified
or superseded for the purposes of this Prospectus, to the extent
that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall
not constitute a part of this Prospectus, except as so modified or
superseded. The modifying or superseding statement need
not state that it has modified or superseded a prior statement or
include any other information set forth in the document that it
modifies or supersedes. The making of such a modifying
or superseding statement shall not be deemed an admission for any
purposes that the modified or superseded statement, when made,
constituted a misrepresentation, an untrue statement of a material
fact or an omission to state a material fact that is required to be
stated or that is necessary to make a statement not misleading in
light of the circumstances in which it was made.
RISK FACTORS
An investment in our Securities is highly speculative and
subject to a number of known and unknown risks. Only
those persons who can bear the risk of the entire loss of their
investment should purchase our Securities. You should
carefully consider the risk factors which are set forth in the 20-F
and the other information contained in this Prospectus, as updated
by our subsequent filings under the U.S. Exchange Act, and the risk
factors and other information contained in any applicable
Prospectus Supplement, before purchasing any of our
Securities.
THE COMPANY
Corporate Information
We were incorporated, effective February 5, 1992, by the
amalgamation of three predecessor companies; we were registered at
the time under the Canada Business Corporations Act.
Following the creation of Caledonia, our Common Shares were listed
for trading on the Toronto Stock Exchange (the “TSX”) and
quoted on the NASDAQ small caps market. Our TSX trading symbol
was “CAL”. On October 16, 1998, we announced that NASDAQ
would no longer quote its securities for trading. Our stock
then commenced trading on NASDAQ’s OTCQX. In June 2005,
depositary interests in Common Shares were admitted to trading on
AIM of the London Stock Exchange under the ticker symbol
“CMCL”. Effective October 10, 2011 Common Shares commenced
trading in the United States on the OTCQX under the ticker symbol
CALVF.
Effective March 19, 2016, we re-domiciled from Canada to Jersey
using a legal process called “Continuance”. The Continuance had no
effect on our listings on the TSX and trading on AIM, or the
trading facility on the OTCQX in the United States.
On June 26, 2017, following approval by shareholders at the annual
general meeting held on June 19, 2017, the Common Shares underwent
an effective 5:1 reverse share split by way of a 100:1 share
consolidation, coupled with a share buyback of resulting fractions,
followed by an immediate 1:20 share division.
On July 24, 2017, we announced that our shares would be listed on
the NYSE American under the ticker symbol “CMCL,” and trading began
on July 27, 2017. At the same time our trading facility on the
OTCQX was cancelled.
Caledonia voluntarily delisted its shares from the TSX on June 19,
2020.
The addresses and telephone numbers of our principal offices
are:
Registered and Head Office
Caledonia Mining Corporation Plc
B006 Millais House
Castle Quay
St Helier
Jersey JE2 3EF
+44 1534 679 9800
African Office - South African Subsidiary
Caledonia Mining South Africa Proprietary Limited
4th Floor, 1 Quadrum Office Park
Johannesburg, Gauteng, 2198
South Africa
(27) 11 447 2499
Intercorporate Relationships
We have the following subsidiaries, all of which are wholly-owned
by the Company (unless otherwise indicated), of which we have the
percentage ownership set forth below and whose assets or revenues
exceed 10% of our consolidated assets or revenues:
| Subsidiaries of the Company |
Country of Incorporation |
Percentage held by Company |
| Caledonia Mining South Africa
Proprietary Limited |
South
Africa |
100 |
| Blanket Mine (1983) (Private)
Limited |
Zimbabwe |
64 |
THE BUSINESS
Background
Effective April 1, 2006 we purchased 100% of the issued shares of
the Zimbabwean company, Caledonia Holdings Zimbabwe (Private) Ltd
(“CHZ”), which held the shares of Blanket Mine (1983)
(Private) Limited, the owner of the operating Blanket Mine.
The purchase consideration was $1,000,000 and the issuance to the
vendor of 20,000,000 shares in our capital. Because we bought
the shares of the company owning the Blanket Mine it thereby
acquired all of the assets of that company and assumed all of its
liabilities.
Description of Our Business
Our activities are focused on Blanket Mine in Zimbabwe. Our
business during the past three completed fiscal years has been
focused primarily on the expansion and operation of the Blanket
Mine and increasing gold production at Blanket Mine.
Generally, gold mining, development and exploration in Southern
Africa is not seasonal, except where heavy seasonal rainfall can
affect surface mining or exploration.
Total gold production at Blanket Mine for 2020 was 57,899oz (2019:
55,182oz; 2018: 54,512oz; 2017: 56,135oz).
Indigenisation of Blanket Mine
During 2012, to comply with Zimbabwean law that required indigenous
Zimbabweans own at least 51% of Blanket Mine, CHZ entered into
agreements to transfer a 51% ownership interest in Blanket Mine
whereby it did the following:
|
· |
sold a 16% interest to the National Indigenisation and Economic
Empowerment Fund (“NIEEF”) for $11.74 million; |
|
· |
sold a 15% interest to Fremiro Investments (Private) Limited
(“Fremiro”), which is owned by indigenous Zimbabweans, for
$11.01 million; |
|
· |
sold a 10% interest to Blanket Employee Trust Services
(Private) Limited (“BETS”) for the benefit of present and
future managers and employees for $7.34 million. The shares in BETS
are held by the Blanket Mine Employee Trust (the “Employee
Trust”) with Blanket Mine’s employees holding participation
units in the Employee Trust; and |
|
· |
donated a 10% ownership interest to the Gwanda Community Share
Ownership Trust (“Community Trust”). In addition Blanket
Mine paid a non-refundable donation of $1 million to the Community
Trust. |
We facilitated the vendor funding of these transactions which is
repaid by way of dividends from Blanket Mine. 80% of dividends
declared by Blanket Mine are used to repay such loans and the
remaining 20% unconditionally accrues to the respective indigenous
shareholders.
Outstanding balances on the facilitation loans attract interest at
a rate of the lower of 7.25% per annum, payable quarterly, or 80%
of Blanket Mine’s dividend in a quarter which is attributable to
indigenous shareholders. The timing of the repayment of the loans
depends on the future financial performance of Blanket Mine and the
extent of future dividends declared by Blanket Mine.
Blanket Mine suspended dividend payments in December 2014 so that
it could fund the capital projects in terms of the Investment Plan
(as described in the 20-F) and had a moratorium of interest on the
facilitation and advanced dividend loans from December 31, 2014 to
July 31, 2016. Blanket Mine resumed dividend payments on August 1,
2016 as a result of which the moratorium of interest on the
facilitation and advance dividend loans ended.
The facilitation loans and interest were distributed by CHZ to our
wholly-owned subsidiaries and thereafter the majority of the loans
and interest were distributed to us as dividends in specie.
On January 21, 2020 we announced that Caledonia had completed the
purchase of Fremiro’s 15% interest in Blanket Mine for a total
consideration of 727,266 new shares in Caledonia and the
cancellation of Fremiro’s facilitation loan. Upon completion,
Caledonia holds 64% of the shares in Blanket Mine.
Please refer to the headings “Business Overview” in the 20-F for a
full description of our business and in particular Blanket
Mine.
MATERIAL CHANGES
Except as otherwise disclosed in this Prospectus there have been no
material changes to our operations that have occurred since
December 31, 2020, and that have not been described in a report on
Form 6-K furnished under the U.S. Exchange Act and incorporated by
reference into this Prospectus.
CONSOLIDATED CAPITALIZATION
The following table sets forth our capitalization and indebtedness
as of December 31, 2020. This table should be read in
conjunction with our audited consolidated financial statements for
the years ended December 31, 2020 and 2019 which are incorporated
by reference into this Prospectus.
|
|
($’000’s) |
|
As at December
31 |
|
| |
|
|
2020 |
|
| |
Total non-current
liabilities |
|
9,913 |
|
| |
|
|
|
|
| |
Short term portion of term loan facility
|
|
408
|
|
| |
Short term portion of
cash-settled share-based payment |
|
336 |
|
| |
Short term portion of lease
liabilities |
|
61 |
|
| |
Trade and other
payables |
|
8,664 |
|
| |
Income taxes payable |
|
495 |
|
| |
Bank overdraft
|
|
-
|
|
| |
|
|
|
|
| |
Total current
liabilities |
|
9,964 |
|
| |
Total
liabilities |
|
19,877 |
|
| |
Total equity |
|
158,043 |
|
|
|
Total equity and liabilities |
|
177,920 |
|
There have been no material changes in our capitalization and
indebtedness, on a consolidated basis, since December 31, 2020.
DESCRIPTION OF SHARE CAPITAL
Our authorized share capital consists of an unlimited number of
Common Shares with no par value and an unlimited number of
Preference Shares with no par value. There are no Preference Shares
in issue.
The following table sets forth information about our share capital
as of April 26, 2021:
| Number of Shares Authorized |
Unlimited |
| |
|
| Par Value per Share |
None |
| |
|
| Number of Shares Issued and Fully-Paid |
12,118,823 Common Shares |
Common Shares
The holders of the Common Shares are entitled to receive notice of
all shareholder meetings and to attend and vote at such
meetings. Certificates representing the Common Shares
are issued in registered form. Registered shareholders are entitled
to one vote for each Common Share held on all matters to be voted
on by the shareholders. Each Common Share is equal to
every other Common Share and, subject to the rights of holders of
shares ranking senior to the Common Shares, if any, each Common
Share is entitled to receive pro rata such dividends as may be
declared by the board of directors (“Board”) out of funds
legally available therefore and to participate equally in the event
of our liquidation, dissolution or winding up, whether voluntary or
involuntary, or any other distribution of our assets among the
shareholders for the purpose of winding up our affairs after we
have paid out our liabilities. Common Shares are not
subject to call or assessment. There are no pre-emptive
or conversion rights, and no provisions at this time for
redemption, purchase or cancellation, surrender, sinking fund or
purchase fund. In addition, there are no provisions in
our articles of association (“Articles”) discriminating
against any existing or prospective holders of such securities as a
result of a shareholder owning a substantial number of shares.
Preference Shares
Pursuant to Jersey law and our Memorandum of Association and the
Articles, Preference Shares may be issued from time to time in one
or more series composed of such number of shares and with such
preference, deferred or other special rights, privileges,
restrictions and conditions attached thereto as shall be fixed from
time to time before issuance by any resolution or resolutions
providing for the issue of the shares of any series which may be
passed by the directors and confirmed and declared by special
resolution of the shareholders. Subject to the rights, privileges,
restrictions and conditions that may be attached to a particular
series of Preference Shares, the Preference Shares of each series
shall (a) with respect to the payment of dividends, be entitled to
a preference over the Common Shares and over any other shares of
the Company ranking junior to the Preference Shares; and (b) on
liquidation, dissolution or winding-up, be entitled to receive
before distributions to holders of Common Shares or shares ranking
junior to the Preference Shares an amount equal to the price of the
issue of the Preference Shares together with any unpaid dividends.
Subject to the rights, privileges, restrictions and conditions that
may be attached to a particular series of Preference Shares, except
in the event of dissolution or disposal of substantially all of the
business of the Company the holders of Preference Shares shall not
be entitled to receive notice of or to attend or vote at any
meeting of the members Company (apart from separate meetings of
holders of Preference Shares).
Share Options
We also have 28,000 shares options outstanding. As of April 26,
2021, the following share options to purchase Common Shares,
granted by us under our Omnibus Equity Incentive Compensation Plan
to our directors, officers, employees and consultants were
outstanding:
|
Number
Outstanding(1)
|
Exercise Price
CAD$
|
Expiry Date
|
| 18,000 |
11.50 |
October 8, 2021 |
| 5,000 |
9.30(2) |
August 25, 2024 |
| 5,000 |
9.30(2) |
August 25, 2024 |
| 28,000 |
|
|
Notes:
|
(1)
(2)
|
Each share option is exercisable to purchase one Common Share.
The exercise price of CAD$9.30 per share was converted into a USD
amount of $7.35 at the USD/CAD exchange rate on the date of
grant.
|
Adjustments will be made in the exercise price and number of Common
Shares deliverable upon the exercise of the share options in the
event of certain corporate transactions, such as share
recapitalization, subdivision or consolidation or if the
outstanding Common Shares are changed into or exchanged for a
different number of our shares or into or for other securities
issued by us or another entity, whether through an arrangement,
amalgamation or other similar procedure or otherwise.
Certain Jersey, Channel Islands Law Considerations
Purchase of Own Shares
As with declaring a dividend, we may not buy back or redeem our
shares unless our directors who are to authorize the buyback or
redemption have made a statutory solvency statement that,
immediately following the date on which the buyback or redemption
is proposed, the company will be able to discharge its liabilities
as they fall due and, having regard to prescribed factors, the
company will be able to continue to carry on business and discharge
its liabilities as they fall due for the 12 months immediately
following the date on which the buyback or redemption is proposed
(or until the company is dissolved on a solvent basis, if
earlier).
If the above conditions are met, we may purchase shares in the
manner described below.
We may purchase on a stock exchange our own fully paid shares
pursuant to a special resolution of our shareholders.
We may purchase our own fully paid shares otherwise than on a stock
exchange pursuant to a special resolution of our shareholders, but
only if the purchase is made on the terms of a written purchase
contract which has been approved by an ordinary resolution of our
shareholders. The shareholder from whom we propose to purchase or
redeem shares is not entitled to take part in such shareholder vote
in respect of the shares to be purchased.
We may fund a redemption or purchase of our own shares from any
source. We cannot purchase our shares if, as a result of such
purchase, only redeemable shares would remain in issue.
If authorized by a resolution of our shareholders, any shares that
we redeem or purchase may be held by us as treasury shares. Any
shares held by us as treasury shares may be cancelled, sold,
transferred for the purposes of or under an employee share scheme
or held without cancelling, selling or transferring them. Shares
redeemed or purchased by us are cancelled where we have not been
authorized to hold these as treasury shares.
Mandatory Purchases and Acquisitions
The Companies (Jersey) Law 1991 (as amended) (the “Companies
Law”) provides that where a person has made an offer to acquire
a class of all of our outstanding shares not already held by the
person and has as a result of such offer acquired or contractually
agreed to acquire 90% or more of such outstanding shares, that
person is then entitled (and may be required) to acquire the
remaining shares of such class. In such circumstances, a holder of
any such remaining shares may apply to the Jersey court for an
order that the person making such offer not be entitled to purchase
the holder’s shares or that the person purchase the holder’s shares
on terms different to those under which the person made such
offer.
Other than as described above and below under “U.K. City Code
on Takeovers and Mergers”, we are not subject to any
regulations under which a shareholder that acquires a certain level
of share ownership is then required to offer to purchase all of our
remaining shares on the same terms as such shareholder’s prior
purchase.
Compromises and Arrangements
Where we and our creditors or shareholders or a class of either of
them propose a compromise or arrangement between us and our
creditors or our shareholders or a class of either of them (as
applicable), the Jersey court may order a meeting of the creditors
or class of creditors or of our shareholders or class of
shareholders (as applicable) to be called in such a manner as the
court directs. Any compromise or arrangement approved by a majority
in number representing 75% or more in value of the creditors or 75%
or more of the voting rights of shareholders or class of either of
them (as applicable) if sanctioned by the court, is binding upon us
and all the creditors, shareholders or members of the specific
class of either of them (as applicable).
Whether the capital of the company is to be treated as being
divided into a single or multiple class(es) of shares is a matter
to be determined by the court. The court may in its discretion
treat a single class of shares as multiple classes, or multiple
classes of shares as a single class, for the purposes of the
shareholder approval referred to above taking into account all
relevant circumstances, which may include circumstances other than
the rights attaching to the shares themselves.
U.K. City Code on Takeovers and Mergers
The U.K. City Code on Takeovers and Mergers, or the Takeover Code,
applies, among other things, to an offer for a company whose
registered office is in the Channel Islands and whose securities
are admitted to trading on a regulated market or a multilateral
trading facility in the United Kingdom or any stock exchange in the
Channel Islands or the Isle of Man (a “Code Company”). We
are therefore a Code Company and are subject to the Takeover
Code.
The Takeover Code provides a framework within which takeovers of
companies subject to it are conducted. In particular, the Takeover
Code contains certain rules in respect of mandatory offers for Code
Companies. Under Rule 9 of the Takeover Code, if a person:
|
• |
acquires an interest in shares of a
Code Company that, when taken together with shares in which persons
acting in concert with such person are interested, carry 30% or
more of the voting rights of the Code Company; or |
|
• |
who, together with persons acting
in concert with such person, is interested in shares that in the
aggregate carry not less than 30% and not more than 50% of the
voting rights in the Code, acquires additional interests in shares
that increase the percentage of shares carrying voting rights in
which that person is interested, |
the acquirer, and, depending on the circumstances, its concert
parties, would be required (except with the consent of the Takeover
Panel) to make a cash offer (or provide a cash alternative) for the
Code Company’s outstanding shares at a price not less than the
highest price paid for any interests in the shares by the acquirer
or its concert parties during the previous 12 months.
Canadian takeover rules are also expected to apply to the Company
unless Canadian shareholders cease to hold at least 10% of the
Company’s shares. The Canadian takeover rules are triggered when an
acquiror crosses a bright-line 20% threshold ownership in a target
company.
Rights of Minority Shareholders
Under article 141 of the Companies Law, a shareholder may apply to
court for relief on the grounds that the conduct of our affairs,
including a proposed or actual act or omission by us, is “unfairly
prejudicial” to the interests of our shareholders generally or of
some part of our shareholders, including at least the shareholder
making the application. What amounts to unfair prejudice is not
defined in the Companies Law. There may also be common law personal
actions available to our shareholders.
Under article 143 of the Companies Law (which sets out the types of
relief a court may grant in relation to an action brought under
article 141 of the Companies Law), the court may make an order
regulating our affairs, requiring us to refrain from doing or
continuing to do an act complained of, authorizing civil
proceedings and providing for the purchase of shares by us or by
any of our other shareholders.
Jersey Regulatory Matters
The Jersey Financial Services Commission, or JFSC, has given, and
has not withdrawn, its consent under Article 2 of the Control of
Borrowing (Jersey) Order 1958 to the issue of Shares. The JFSC is
protected by the Control of Borrowing (Jersey) Law 1947 against any
liability arising from the discharge of its functions under that
law.
We have not yet sought the consent of the JFSC under Articles 2 or
4 (as applicable) of the Control of Borrowing (Jersey) Order 1958
to the issue of any other Securities, but we may be required to do
so before we can issue any such Securities.
This document does not constitute a “prospectus” for the purposes
of the Companies (Jersey) Law 1991 as no invitation is made
pursuant to it to the public to become a member of us or to acquire
or apply for any securities issued by us. However, such an
invitation might be made pursuant to any Prospectus Supplement and,
if it is, we will need to deliver a copy of such Prospectus
Supplement (together with this document) to the Jersey Registrar of
Companies in accordance with Article 5 of the Companies (General
Provisions) (Jersey) Order 2002 and obtain from the Jersey
Registrar of Companies his consent to its circulation.
It must be distinctly understood that, in giving any such consents,
neither the Jersey Registrar of Companies nor the JFSC takes, or
will take, any responsibility for our financial soundness or for
the correctness of any statements made, or opinions expressed, with
regard to it. If you are in any doubt about the contents of this
document or any Prospectus Supplement, you should consult your
stockbroker, bank manager, solicitor, accountant or other financial
adviser.
The price of securities and the income from them can go down as
well as up. Nothing in this document or any Prospectus Supplement
or anything communicated to holders or potential holders of any of
our securities (or interests in them) by or on our behalf is
intended to constitute or should be construed as advice on the
merits of the purchase of or subscription for any securities (or
interests in them) for the purposes of the Financial Services
(Jersey) Law 1998.
Our directors have taken all reasonable care to ensure that the
facts stated in this document are true and accurate in all material
respects, and that there are no other facts the omission of which
would make misleading any statement in the document, whether of
facts or opinion. All of our directors accept responsibility
accordingly.
USE OF PROCEEDS
Unless otherwise specified in a Prospectus Supplement, the net
proceeds from the sale of the Securities will be used for general
corporate purposes, including funding working capital, potential
future acquisitions and capital expenditures. Each Prospectus
Supplement will contain specific information concerning the use of
proceeds from that sale of Securities.
All expenses relating to an Offering of Securities and any
compensation paid to underwriters, dealers or agents, as the case
may be, will be paid out of our general funds, unless otherwise
stated in the applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
We may sell the Securities, separately or together, to or through
underwriters or dealers purchasing as principals for public
offering and sale by them, and also may sell Securities to one or
more other purchasers directly or through agents. Each
Prospectus Supplement will set forth the terms of the Offering,
including the name or names of any underwriters or agents, if any,
the purchase price or prices of the Securities and the proceeds we
will receive from the sale of the Securities.
The Securities may be sold from time to time in one or more
transactions at a fixed price or prices which may be changed or at
market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices including
sales in transactions that are deemed to be “at-the-market”
distributions, including sales made directly on the NYSE American
or other existing trading markets for the
securities. The prices at which the Securities may be
offered may vary as between purchasers and during the period of
distribution. If, in connection with the Offering of
Securities at a fixed price or prices, the underwriters, if any,
have made a bona fide effort to sell all of the Securities at the
initial offering price fixed in the applicable Prospectus
Supplement, the public offering price may be decreased and
thereafter further changed, from time to time, to an amount not
greater than the initial public offering price fixed in such
Prospectus Supplement, in which case the compensation realized by
the underwriters will be decreased by the amount that the aggregate
price paid by purchasers for the Securities is less than the gross
proceeds paid to us by the underwriters.
Underwriters, dealers and agents who participate in the
distribution of the Securities may be entitled under agreements to
be entered into with us to indemnification by us against certain
liabilities, including liabilities under the Securities Act and
Canadian, United Kingdom and Jersey securities legislation, or to
contribution with respect to payments which such underwriters,
dealers or agents may be required to make in respect thereof. Such
underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for, us in the ordinary
course of business.
In connection with any Offering of Securities, except as otherwise
set out in a Prospectus Supplement relating to a particular
Offering of Securities, the underwriters may over-allot or effect
transactions intended to maintain or stabilize the market price of
the Securities offered at a level above that which might otherwise
prevail in the open market. Such transactions, if
commenced, may be discontinued at any time.
DESCRIPTION OF SECURITIES
Shares
We may issue Common Shares and / or Preference
Shares. Shares may be offered separately or together
with other Securities and may be attached to or separate from any
other Securities. See “Description of Share Capital” and
“Governing Corporate Documents” for a description of the general
terms that will apply to any Shares issued pursuant to this
Prospectus. The Shares to be issued in connection with
any Offering hereunder will be authorized by the Board at such time
as the Board determines to conduct an Offering hereunder.
Warrants
We may issue Warrants to purchase Common Shares, Preference Shares
or both. This section describes the general terms that
will apply to any Warrants issued pursuant to this
Prospectus. Warrants may be offered separately or
together with other Securities and may be attached to or separate
from any other Securities.
Each series of Warrants may be issued under a separate warrant
indenture to be entered into between us and one or more banks or
trust companies acting as Warrant agent. The Warrant
agent will act solely as our agent and will not assume a
relationship of agency with any holders of Warrant certificates or
beneficial owners of Warrants.
The applicable Prospectus Supplement will include details of the
warrant indentures, if any, governing the Warrants being
offered. The specific terms of the Warrants, and the
extent to which the general terms described in this section apply
to those Warrants, will be set out in the applicable Prospectus
Supplement. The Prospectus Supplement relating to any
Warrants we offer will describe the Warrants and the specific terms
relating to the Offering. The description will include,
where applicable:
| ·
|
the designation and aggregate
number of Warrants; |
| ·
|
the price at which the Warrants
will be offered; |
| ·
|
the currency or currencies in
which the Warrants will be offered; |
| ·
|
the date on which the right to
exercise the Warrants will commence and the date on which the right
will expire; |
| ·
|
the designation, number and terms
of the Shares that may be purchased upon exercise of the Warrants,
and the procedures that will result in the adjustment of those
numbers; |
| ·
|
the exercise price of the
Warrants and any provisions for changes or adjustments in the
exercise price; |
| ·
|
the designation
and terms of the Securities, if any, with which the
Warrants will be offered, and the number of Warrants that will be
offered with each Security; |
| ·
|
if the Warrants are issued as a
Unit with another Security, the date, if any, on and after which
the Warrants and the other Security will be separately
transferable; |
| ·
|
any minimum or maximum amount of
Warrants that may be exercised at any one time; |
| ·
|
any terms, procedures and
limitations relating to the transferability, exchange or exercise
of the Warrants; |
| ·
|
whether the Warrants will be
subject to redemption or call and, if so, the terms of such
redemption or call provisions; |
| ·
|
as applicable, material United
States and Canadian federal and United Kingdom income tax
consequences of owning the Warrants; and |
| ·
|
any other material terms or
conditions of the Warrants. |
Warrant certificates will be exchangeable for new Warrant
certificates of different denominations at the office indicated in
the Prospectus Supplement. Prior to the exercise of
their Warrants, holders of Warrants will not have any of the rights
of holders of Shares. We may amend the warrant
indenture(s), if any, and the Warrants, without the consent of the
holders of the Warrants, to cure any ambiguity, to cure, correct or
supplement any defective or inconsistent provision, or in any other
manner that will not prejudice the rights of the holders of
outstanding Warrants, as a group.
Units
We may issue Units, which may consist of one or more Shares,
Warrants or any combination of Securities as is specified in the
relevant Prospectus Supplement. In addition, the
relevant Prospectus Supplement relating to an Offering of Units
will describe all material terms of any Units offered, including,
as applicable:
| ·
|
the designation and aggregate
number of Units being offered; |
| ·
|
the price at which the Units will
be offered; |
| ·
|
the designation, number and terms
of the Securities comprising the Units and any agreement governing
the Units; |
| ·
|
the date or dates, if any, on or
after which the Securities comprising the Units will be
transferable separately; |
| ·
|
whether we will apply to list the
Units on any exchange; |
| ·
|
material income tax consequences
of owning the Units, including how the purchase price paid for the
Units will be allocated among the Securities comprising the Units;
and |
| ·
|
any other material terms or
conditions of the Units. |
EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following is a statement of the expenses (all of which are
estimated), other than any underwriting discounts and commissions
and expenses reimbursed by us, if any, to be incurred in connection
with a distribution of an assumed amount of $100,000,000 of
Securities under the Offering.
| SEC registration fees |
$ |
10,910.00 |
|
| NYSE American Listing fees |
|
(1 |
) |
| Printing Expenses |
|
(1 |
) |
| Legal fees and expenses |
|
(1 |
) |
| Accountants’ fees and expenses |
|
(1 |
) |
| Transfer agent fees and expenses |
|
(1 |
) |
| Miscellaneous |
|
(1 |
) |
| Total |
|
$ |
|
Notes:
| (1) |
To be provided by a Prospectus
Supplement, or as an exhibit to a Report on Form 6-K that is
incorporated by reference into this Prospectus. |
GOVERNING CORPORATE DOCUMENTS
General Overview
As a result of the Continuance, we continued as a company under the
Companies Law on March 19, 2016, under incorporation number
120924. See “The Company”.
The following is a summary of certain provisions of our Articles
and the Companies Law applicable to us. Please note that this
summary is not intended to be exhaustive and for further
information please refer to the full version of our Articles.
Director’s power to vote on a proposal, arrangement or
contract in which the director is materially
interested.
An interested director must disclose to us the nature and extent of
any interest in a transaction with us, or one of our subsidiaries,
which to a material extent conflicts or may conflict with our
interests and of which the director is aware. Failure to disclose
an interest entitles us or a shareholder to apply to the court for
an order setting aside the transaction concerned and directing that
the director account to us for any profit.
A transaction is not voidable and a director is not accountable
notwithstanding a failure to disclose an interest if the
transaction is confirmed by special resolution and the nature and
extent of the director’s interest in the transaction are disclosed
in reasonable detail in the notice calling the meeting at which the
resolution is passed.
Although it may still order that a director account for any profit,
a court will not set aside a transaction unless it is satisfied
that the interests of third parties who have acted in good faith
would not thereby be unfairly prejudiced and the transaction was
not reasonable and fair in our interests at the time it was entered
into.
Except as otherwise provided in the Articles and save in respect of
a limited number of instances as set out in the Articles, a
director shall not vote on, or be counted in the quorum in relation
to, any resolution of the Board or of a committee of the Board
concerning any matter in which he has to his knowledge, directly or
indirectly, an interest (other than his interest in shares or
debentures or other securities of, or otherwise in or through, the
Company) or duty which (together with any interest of a person
connected with him) is material and, if he shall do so, his vote
shall not be counted.
Directors’ power, in the absence of an independent quorum, to
vote compensation to themselves or any members of their
body.
The compensation of the directors is decided by the directors
unless the Board specifically requests approval of the compensation
from the shareholders. If the issuance of compensation
to the directors is decided by the directors, a quorum is the
majority of the directors in office. Our Articles do not
require that the compensation of any director be approved by
disinterested directors.
We have a compensation committee which is currently composed of
three independent directors. The compensation committee
makes recommendations to the Board with respect to compensation,
including bonuses, incentive stock options and securities of our
directors and executive officers.
| Borrowing powers
exercisable by the directors and how such borrowing powers may be
varied. |
The Board may exercise all our powers to borrow money, to
guarantee, to indemnify and to mortgage or charge all or any part
of our undertaking, property and assets (present and future) and
uncalled capital and, subject to the Companies Law, to issue
debentures and other securities, whether outright or as collateral
security, for any debt, liability or obligation of ours or of any
third party.
The Board shall restrict our borrowings and exercise all voting and
other rights or powers of control exercisable by us in relation to
its subsidiary undertakings (if any) so as to secure (but as
regards subsidiary undertakings only in so far as by the exercise
of such rights or powers of control the Board can secure) that the
aggregate principal amount from time to time outstanding of all
borrowings by our group (exclusive of borrowings owing by one
member of our group to another member of our group) shall not at
any time without the previous sanction of an ordinary resolution of
the Company exceed an amount equal to three times the Adjusted
Capital and Reserves (as defined in the Articles). The borrowing
powers may be varied by amendment to our Articles which requires
approval of our shareholders by special resolution, being a
resolution passed by at least 2/3 majority of the votes cast on the
resolution (a “Special Resolution”).
| Retirement and
non-retirement of directors under an age limit
requirement. |
There are no such provisions applicable to us under the Articles or
the Companies Law.
| Number of Common Shares
required for a director’s qualification. |
Under our Articles, our directors are not required to hold any of
our Common Shares as qualification for service on the Board.
Alienability of Shares
Subject to such of the restrictions of the Articles as may be
applicable, a member may transfer all or any of his shares, in the
case of shares held in certificated form, by an instrument of
transfer executed by or on behalf of the transferor in any usual
form or in any other form which the Board may approve or, in the
case of shares held in uncertificated form, in accordance with the
Uncertificated Securities (Jersey) Order 1999, as amended from time
to time and any provisions of or under the Companies Law which
supplement or replace such Order and the system’s rules and
otherwise in such manner as the Board in its absolute discretion
shall determine. Subject to the Companies Law, the transferor shall
be deemed to remain the holder of the share until the name of the
transferee is entered in the Register in respect of it.
Changes to Rights and Restrictions of Common Shares
Any of the rights for the time being attached to any share or class
of our shares (and notwithstanding that we may be or be about to be
in a winding up) may be varied or abrogated in such manner (if any)
as may be provided by such rights or, in the absence of any such
provision, either with the consent in writing of the holders of not
less than two-thirds in number of the issued shares of the class or
with the sanction of a Special Resolution passed at a separate
general meeting of the holders of shares of the class duly convened
and held as provided in the Articles (but not otherwise).
Dividend Record
We paid our initial dividend in February 2012 of 6 Canadian cents.
On April 4, 2013 we announced an annual dividend in respect of the
year to December 31, 2012 also of 6 Canadian cents. On November 25,
2013 we announced that in 2014 we intended to pay an annual
aggregate dividend of 6 Canadian cents per Common Share, payable on
a quarterly basis. The first quarterly dividend of 1.5 Canadian
cents per Common Share was paid at the end of January 2014 and
further quarterly dividends were subsequently paid at the end of
April, July, October in each year. In December 2015, we announced
that with effect from the results for the year to December 31, 2015
(which were released at the end of March 2016), it would report its
financial results in United States Dollars, instead of Canadian
Dollars. Accordingly all dividends would also be declared in United
States Dollars. In January 2016, we announced that the dividend
payable at the end of January 2016 would be 1.125 US cents and the
quarterly dividend policy was subsequently increased in the third
quarter of 2016 from 1.125 US cents per share to 1.375 US cents per
share, an increase of 22%. In conjunction with the overall 1 for 5
share consolidation which became effective on June 26,
2017, we announced on July 4, 2017 that we had made a
commensurate adjustment to the dividend by increasing it
fivefold (to 6.875 US cents per share). On January 3, 2020, it was
announced that Caledonia would be increasing the quarterly dividend
by approximately 9% to 7.5 US cents per share, commencing with the
dividend to be paid at the end of January 2020. On June 29, 2020,
it was announced that Caledonia would be increasing the quarterly
dividend by approximately 13% to 8.5 US cents per share, commencing
with the dividend to be paid at the end of July 2020. On October 1,
2020 a further increase was announced to 10 US cents per share (an
18% increase), on January 4, 2021 another increase was announced to
11 US cents per share (a 10% increase) and on April 6, 2021 the
dividend was increased to 12 US cents per share (a 9%
increase).
Since 2013, we have paid dividends to shareholders totaling the
equivalent of approximately $2.76 per share (on a post share
consolidation basis). It is expected that the dividend of 12 United
States cents per annum, paid in equal quarterly instalments, will
be maintained.
In order to pay a dividend (or any distribution), the authorising
directors must make a statement that they have formed the opinion
that we will be able to continue to pay our debts as they fall due,
not just immediately after payment but also for the subsequent 12
months or until we are wound up whichever is earlier.
Ownership of Securities and Change of Control
Save as set out below in respect of the imposition of restrictions
for failure to disclose interests in shares, there are no
limitations on the rights of non-resident or foreign shareholders
to hold or exercise voting rights on the securities imposed by the
laws of our jurisdiction of incorporation or by our constituent
documents. See also “Exchange Controls” below.
Any person who beneficially owns or controls, directly or
indirectly, more than 10% of our Common Shares is considered an
insider and must file an insider report in Canada, within ten days
of becoming an insider, disclosing any direct or indirect
beneficial ownership of, or control over direction over securities
of our company. In addition, if we hold any of our own
securities, we must disclose such ownership.
Under the Exchange Act, all holders of 5% or greater of our share
capital must report their holdings to the SEC on “Schedule 13G” if
the holdings are passive and held not with an intent to acquire
control and non-passive holders must report on “Schedule
13D”. Holdings should be calculated to include the holdings
of multiple parties which are affiliates or acting in concert with
regards to a particular stock. Schedule 13G must be filed
within 10 days of acquiring 5% or greater and then updated for any
changes each year within 45 days of the year end.
Under the AIM Rules for Companies, we must disclose, insofar as we
have such information, certain information concerning any relevant
change (which means a move up or down through a whole percentage
point at or above 3%) in a significant shareholder (which means any
person with an interest in 3% or more of our share capital). Under
our Articles, and in accordance with guidance provided by the AIM
Rules, our significant shareholders have an obligation to inform us
of relevant changes and should they not do so following the issue
of a notice by us we may impose restrictions on the rights of those
persons similar to those described in the following paragraph.
Under our Articles, we may send a disclosure notice to any person
whom we know or have reasonable cause to believe is interested in
our shares or to have been so interested at any time during the
three years immediately preceding the date on which the disclosure
notice is issued. If the holder of, or any person appearing to be
interested in, any share has been served with a disclosure notice
and is in default of complying with the disclosure notice, we may
in certain circumstances impose restrictions on the holder's voting
rights and, where the holder is interested or appears to us to be
interested in at least 0.25 per cent. of the issued shares of the
relevant class, to also suspend dividend and transfer rights on
that holder's shares.
There are no provisions in our Articles intended to delay, defer or
prevent a change in control of our Company. However, please see
“U.K. City Code on takeovers and mergers” above.
Meetings of the Shareholders
Annual and Extraordinary General Meetings
Under our Articles, our annual general meeting is to be held once
in each calendar year and not more than 13 months after the
previous meeting. Additionally, the Board may call a
meeting of shareholders at any time.
We must give shareholders not less than 21 clear days’ notice of
any meeting of the shareholders.
Despite any other provision of the Articles, we or the Board may
fix any date as the record date for any dividend, distribution,
allotment or issue or for determining shareholders entitled to
receive notice of and, subject to the Uncertificated Securities
(Jersey) Order 1999, to vote at any meeting of shareholders.
No business shall be transacted at any general meeting unless a
quorum is present when the meeting proceeds to business, but the
absence of a quorum shall not preclude the choice or appointment of
a chairman of the meeting. Except as otherwise provided by the
Articles, two members entitled to vote at the meeting present in
person or by proxy together holding or representing by proxy not
less than five per cent. of the issued shares shall be a quorum for
all purposes. At any general meeting a resolution put to the vote
of the meeting shall be decided on a show of hands unless before or
on the declaration of the result of the show of hands or on the
withdrawal of any other demand for a poll a poll is duly demanded.
Subject to the Companies Law, a poll may be demanded by:
|
· |
the chairman of the meeting; |
|
· |
at least five members or proxies
entitled to vote on the resolution; |
|
· |
any member or proxy alone or
together with one or more others representing in aggregate at least
one-tenth of the total voting rights of all the members having the
right to attend and vote on the resolution (excluding any voting
rights attached to any shares held as treasury shares); or |
|
· |
any member or proxy alone or
together with one or more others holding or having been appointed
in respect of shares conferring a right to vote on the resolution,
being shares on which an aggregate sum has been paid up equal to
not less than one-tenth of the total sum paid up on all the shares
conferring that right (excluding any voting rights attached to any
shares held as treasury shares). |
Unless a poll is so demanded and the demand is not withdrawn, a
declaration by the chairman of the meeting that a resolution has
been carried or carried unanimously or by a particular majority or
not carried by a particular majority or lost and an entry to that
effect in the minutes of the meeting shall be conclusive evidence
of the fact without proof of the number or proportion of the votes
recorded in favour of or against such resolution.
Our Board is not separated into classes and there are no provisions
which provide for cumulative voting in the election of
directors.
Differences from Requirements in the United States
Differences in Corporate Law
Set forth below is a comparison of certain shareholder rights and
corporate governance matters under Delaware law and Jersey law:
|
Corporate Law Issue
|
|
Delaware
Law |
|
Jersey
Law |
| Special Meetings of
Shareholders |
|
Shareholders generally do not
have the right to call meetings of shareholders unless that right
is granted in the certificate of incorporation or by-laws. However,
if a corporation fails to hold its annual meeting within a period
of 30 days after the date designated for the annual meeting, or if
no date has been designated for a period of 13 months after its
last annual meeting, the Delaware Court of Chancery may order a
meeting to be held upon the application of a
shareholder. |
|
Shareholders holding 10% or more of the company’s voting rights and
entitled to vote at the relevant meeting may legally require
directors to call a meeting of shareholders. Under the Articles,
the percentage required to requisition a meeting is reduced to
5%.
The Jersey Financial Services Commission, or JFSC, may, at the
request of any officer, secretary or shareholder, call or direct
the calling of an annual general meeting. Failure to call an annual
general meeting in accordance with the requirements of the
Companies Law is a criminal offense on the part of a Jersey company
and its directors and secretary.
|
|
Interested Director Transactions
|
|
Interested director transactions are permissible and may not be
legally voided if:
• either a majority of disinterested directors, or a majority in
interest of holders of shares of the corporation’s capital stock
entitled to vote upon the matter, approves the transaction upon
disclosure of all material facts; or
• the transaction is determined to have been fair as to the
corporation as of the time it is authorized, approved or ratified
by the board of directors, a committee thereof or the
shareholders.
|
|
An interested director must disclose to the company the nature and
extent of any interest in a transaction with the company, or one of
its subsidiaries, which to a material extent conflicts or may
conflict with the interests of the company and of which the
director is aware. Failure to disclose an interest entitles the
company or a shareholder to apply to the court for an order setting
aside the transaction concerned and directing that the director
account to the company for any profit.
A transaction is not voidable and a director is not accountable
notwithstanding a failure to disclose an interest if the
transaction is confirmed by special resolution and the nature and
extent of the director’s interest in the transaction are disclosed
in reasonable detail in the notice calling the meeting at which the
resolution is passed.
Although it may still order that a director account for any profit,
a court will not set aside a transaction unless it is satisfied
that the interests of third parties who have acted in good faith
would not thereby be unfairly prejudiced and the transaction was
not reasonable and fair in the interests of the company at the time
it was entered into.
The Articles set out a limited number of transactions and matters
in which a director may be interested and in which he may vote and
be counted in the quorum in relation to a resolution on the
matter.
|
|
Cumulative Voting
|
|
The certificate of incorporation of a Delaware corporation may
provide that shareholders of any class or classes or of any series
may vote cumulatively either at all elections or at elections under
specified circumstances.
|
|
There are no
provisions in the Companies Law relating to cumulative
voting. |
| Approval of Corporate
Matters by Written Consent |
|
Unless otherwise specified in a corporation’s certificate of
incorporation, shareholders may take action permitted to be taken
at an annual or special meeting, without a meeting, notice or a
vote, if consents, in writing, setting forth the action, are signed
by shareholders with not less than the minimum number of votes that
would be necessary to authorize the action at a meeting. All
consents must be dated and are only effective if the requisite
signatures are collected within 60 days of the earliest dated
consent delivered.
|
|
If permitted by the articles of association of a company, a written
consent signed and passed by the specified majority of members may
affect any matter that otherwise may be brought before a
shareholders’ meeting, except for the removal of a company’s
auditors. Such consent shall be deemed effective when the
instrument, or the last of several instruments, is signed by the
specified majority of members or on such later date as is specified
in the resolution.
The Articles do not contain provisions regarding shareholder
resolutions in writing.
|
| Business
Combinations |
|
With certain exceptions, a merger, consolidation or sale of all or
substantially all of the assets of a Delaware corporation must be
approved by the board of directors and a majority of the
outstanding shares entitled to vote thereon.
|
|
A sale or disposal of all or substantially all the assets of a
Jersey company must be approved by the board of directors and, only
if the articles of association of the company require, by the
shareholders in general meeting. A merger involving a Jersey
company must be generally documented in a merger agreement which
must be approved by special resolution of that company.
|
|
Limitations on Director’s Liability and Indemnification of
Directors and Officers
|
|
A Delaware corporation may indemnify a director or officer of the
corporation against expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred in defense of an action, suit or proceeding by
reason of his or her position if (i) the director or officer acted
in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation and (ii)
with respect to any criminal action or proceeding, the director or
officer had no reasonable cause to believe his or her conduct was
unlawful.
|
|
The Companies Law does not contain any provision permitting Jersey
companies to limit the liabilities of directors for breach of
fiduciary duty.
However, a Jersey company may exempt from liability, and indemnify
directors and officers, for liabilities:
• incurred in defending any civil or criminal legal proceedings
where:
- the
person is either acquitted or receives a judgment in their
favor;
- where
the proceedings are discontinued other than by reason of such
person (or someone on their behalf) giving some benefit or
suffering some detriment; or
- where
the proceedings are settled on terms that such person (or someone
on their behalf) gives some benefit or suffers some detriment but
in the opinion of a majority of the disinterested directors, the
person was substantially successful on the merits in the person’s
resistance to the proceedings;
• incurred to anyone other than to the
company if the person acted in good faith with a view to the best
interests of the company;
• incurred in connection with an
application made to the court for relief from liability for
negligence, default, breach of duty or breach of trust under
Article 212 of the Companies Law in which relief is granted to the
person by the court; or
• incurred in a case in which the company
normally maintains insurance for persons other than directors.
|
|
Appraisal Rights
|
|
A shareholder of a Delaware corporation participating in certain
major corporate transactions may, under certain circumstances, be
entitled to appraisal rights under which the shareholder may
receive cash in the amount of the fair value of the shares held by
that shareholder (as determined by a court) in lieu of the
consideration the shareholder would otherwise receive in the
transaction.
|
|
There are no appraisal rights
under the Companies Law but the Articles include dissent rights of
shareholders, based on Canadian law, whereby shareholders who
dissent to certain transactions of the Company may apply to have
the Company buy their shares for fair value. |
|
Shareholder Suits
|
|
Class actions and derivative actions generally are available to the
shareholders of a Delaware corporation for, among other things,
breach of fiduciary duty, corporate waste and actions not taken in
accordance with applicable law. In such actions, the court has
discretion to permit the winning party to recover attorneys’ fees
incurred in connection with such action.
|
|
Under Article 141 of the Companies Law, a shareholder may apply to
court for relief on the ground that the conduct of a company’s
affairs, including a proposed or actual act or omission by a
company, is “unfairly prejudicial” to the interests of shareholders
generally or of some part of shareholders, including at least the
shareholder making the application.
There may also be customary law personal actions available to
shareholders. Under Article 143 of the Companies Law (which sets
out the types of relief a court may grant in relation to an action
brought under Article 141 of the Companies Law), the court may make
an order regulating the affairs of a company, requiring a company
to refrain from doing or continuing to do an act complained of,
authorizing civil proceedings and providing for the purchase of
shares by a company or by any of its other shareholders.
|
| Inspection of Books and
Records |
|
All shareholders of a Delaware corporation have the right, upon
written demand, to inspect or obtain copies of the corporation’s
shares ledger and its other books and records for any purpose
reasonably related to such person’s interest as a shareholder.
|
|
The register of shareholders and books containing the minutes of
general meetings or of meetings of any class of shareholders of a
Jersey company must during business hours be open to the inspection
of a shareholder of the company without charge. The register of
directors and secretaries must during business hours (subject to
such reasonable restrictions as the company may by its articles of
association or in general meeting impose, but so that not less than
two hours in each business day be allowed for inspection) be open
to the inspection of a shareholder or director of the company
without charge.
|
|
Amendments to Charter
|
|
Amendments to the certificate of incorporation of a Delaware
corporation require the affirmative vote of the holders of a
majority of the outstanding shares entitled to vote thereon or such
greater vote as is provided for in the certificate of
incorporation. A provision in the certificate of incorporation
requiring the vote of a greater number or proportion of the
directors or of the holders of any class of shares than is required
by Delaware corporate law may not be amended, altered or repealed
except by such greater vote.
|
|
The memorandum of association and
the articles of association of a Jersey company may only be amended
by special resolution (being a two-thirds majority if the articles
of association of the company do not specify a greater majority)
passed by shareholders in general meeting or by written resolution
signed by all the shareholders entitled to vote. |
| Blank
Check Preferred Stock/Shares |
|
Under Delaware law, the certificate of incorporation of a
corporation may give the board the right to issue new classes of
preferred shares with voting, conversion, dividend distribution,
and other rights to be determined by the board at the time of
issuance, which could prevent a takeover attempt and thereby
preclude shareholders from realizing a potential premium over the
market value of their shares.
In addition, Delaware law does not prohibit a corporation from
adopting a shareholder rights plan, or “poison pill,” which could
prevent a takeover attempt and also preclude shareholders from
realizing a potential premium over the market value of their
shares.
|
|
The Takeover Code requires a target company shareholders' consent
in general meeting before the target company can take any action
(other than seeking alternative bids) that may result in the
frustration of a takeover bid. Moreover, the Takeover Code provides
that the board of directors of an offeree company must act in the
interests of the company as a whole and must not deny the holders
of securities the opportunity to decide on the merits of a takeover
bid.
|
|
Distributions and Dividends; Repurchases and
Redemptions
|
|
Under Delaware law, subject to any restrictions contained in the
certificate of incorporation, a corporation may pay dividends out
of capital surplus or, if there is no surplus, out of net profits
for the current and/or the preceding fiscal year in which the
dividend is declared, as long as the amount of capital of the
corporation following the declaration and payment of the dividend
is not less than the aggregate amount of the capital represented by
issued and outstanding shares having a preference upon the
distribution of assets. Surplus is defined in Delaware law as the
excess of the net assets over capital, as such capital may be
adjusted by the board.
A Delaware corporation may purchase or redeem shares of any class
except when its capital is impaired or would be impaired by the
purchase or redemption, and it may not purchase, for more than the
price at which they may be redeemed, any of its shares which are
redeemable at the option of the corporation. A corporation may,
however, purchase or redeem out of capital shares that are entitled
upon any distribution of its assets to a preference over another
class or series of its shares if the shares are to be retired and
the capital reduced.
|
|
Under the Companies Law, a Jersey company may make a distribution
at any time and out of any source provided that the directors of
the company who authorize the distribution make an immediate and 12
month forward looking cash-flow solvency statement.
Likewise, authorizing directors must also make a solvency statement
in the event of redeeming or purchasing the company’s shares.
The Companies Law allows a Jersey company to purchase its own
shares, whether they are redeemable or not, provided that the
purchase is sanctioned by a special resolution. The monies payable
on the redemption of redeemable shares or on the purchase of its
own shares by a Jersey company may be funded from any source,
including capital, provided that such shares are fully paid.
If shares are to be purchased other than on a stock exchange, they
may only be purchased pursuant to a contract approved in advance by
an ordinary resolution of the company and they shall not carry the
right to vote on the resolution sanctioning the purchase or
approving the contract. If shares are to be purchased on a stock
exchange, the resolution authorizing the purchase must specify the
maximum number of shares to be purchased; the maximum and minimum
prices which may be paid; and
the date (not being later than 5 years after the passing of the
resolution) on which the authority to purchase is to expire.
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EXCHANGE CONTROLS
Jersey has no system of exchange controls. There are no
Jersey law restrictions specifically targeted to restrict the
repatriation of capital or earnings of a Jersey public company to
non-resident investors, and there are no laws in Jersey or exchange
restrictions specifically targeted to restrict the remittance of
dividends, profits, interest, royalties or other payments to
non-resident holders of Common Shares.
There is no limitation imposed by the laws of Jersey or by our
constituent documents on the right of a non-resident to hold or
vote the Common Shares.
CERTAIN INCOME TAX
CONSIDERATIONS
Material income tax consequences relating to the purchase,
ownership and disposition of any of the Securities offered by this
Prospectus will be set forth in the applicable Prospectus
Supplement relating to the Offering of those
Securities. You are urged to consult your own tax
advisors prior to any acquisition of our Securities.
LEGAL MATTERS
Certain legal matters relating to the offering of Securities
hereunder will be passed upon on our behalf by Mourant Ozannes
(Jersey) LLP (“Mourant”) with respect to Jersey legal
matters. Mourant’s Jersey office is located at
22 Grenville Street, St Helier, Jersey
JE4 8PX, Channel Islands.
INTEREST OF EXPERTS
To our knowledge, none of the experts named in this Prospectus
held, at the time they prepared or certified such statement, report
or valuation, received after such time or will receive any
registered or beneficial interest, direct or indirect, in any
securities or other property of our Company or one of our
associates or affiliates otherwise than by remuneration as
employees or consultants of our business, none of which is
contingent on the success of an offering of the Securities.
AUDITORS, TRANSFER AGENT AND
REGISTRAR
Our auditors are BDO South Africa Inc. (“BDO”), Chartered
Accountants (SA), Wanderers Office Park, 52 Corlett Drive, Illovo,
2196, who provided an auditor’s report on our audited consolidated
financial statements as at December 31, 2020 and December 31, 2019.
BDO has advised us that they are independent of our Company within
the rules of professional conduct of the South African Institute of
Chartered Accountants and within the meaning of the Securities Act
and the applicable rules and regulations adopted by the SEC and the
Public Company Accounting Oversight Board (United States).
The transfer agent and registrar for the Common Shares is
Computershare of 150 Royall Street, Canton, Massachusetts,
02021.
CALEDONIA MINING CORPORATION PLC
Up to $30,000,000
Common Shares
PROSPECTUS SUPPLEMENT
Cantor
May 18, 2023
Caledonia Mining (AMEX:CMCL)
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Caledonia Mining (AMEX:CMCL)
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